Cathie Wood: Bitcoin’s 4-Year Cycle is Changing as Institutions Stabilize the Market

Cathie Wood, CEO of Ark Invest, argues that Bitcoin’s traditional four-year cycle may no longer define its long-term behavior. She attributes this shift to increasing institutional adoption, which is reducing Bitcoin's volatility and preventing significant crashes. Wood notes that Bitcoin's crashes, which used to range from 75% to 90%, are becoming less frequent as large financial institutions accumulate Bitcoin.

Bitcoin's price movements have traditionally been linked to halving events, which occur every four years. The most recent halving in April 2024 reduced the mining reward to 3.125 BTC. Historically, this has triggered supply squeezes and rallies. However, Wood suggests that Bitcoin now moves more like a risk-on asset, trading in line with equities and real estate rather than serving as a hedge.

Wood’s comments are part of a broader debate. Some analysts believe Bitcoin no longer responds to halving cycles the way it used to. Institutions, particularly through ETFs, have diminished the influence of halvings as price drivers. Glassnode, however, argues that Bitcoin’s market structure still mirrors past cycles, with institutional investors helping to smooth out volatility.

With institutional involvement, Bitcoin's market is shifting. Institutional players are locking in supply, reducing volatility and providing stability. Bitcoin's price movements are now less tied to retail speculation and more influenced by long-term trends.

Although the cycle may be evolving, many experts agree that Bitcoin’s future price action will be determined by broader economic factors and longer trends. Analysts expect that price corrections may be shallower in the future, but rallies could last longer.