Why Bitcoin Could Skip the 4-Year Cycle in 2025, According to Grayscale

Key takeaways

• The Bitcoin halving pricing model that shaped the early history of Bitcoin is losing its power. As more BTC enters circulation, each halving has a smaller relative impact.

• According to Grayscale, the current Bitcoin market is shaped more by institutional capital than the retail speculation that defined previous cycles.

• Unlike the explosive rebounds of 2013 and 2017, Bitcoin’s recent price rally has been more controlled. Grayscale notes that the 30% drop that followed looks like a typical bull market correction.

• Interest rate expectations, bipartisan US crypto regulatory dynamics, and the integration of Bitcoin into institutional portfolios are increasingly shaping market behavior.

Since its inception, the price of Bitcoin (BTC) has followed a predictable trend. A scheduled event cuts the supply of Bitcoin in half and creates a shortage. This situation was often followed by periods of sharp price increases and subsequent corrections. The repeating sequence, widely known as the four-year cycle, has heavily influenced investor expectations since the early days of Bitcoin.

A recent analysis from Grayscale, supported by on-chain data from Glassnode and market structure insights from Coinbase Institutional, takes a different view of Bitcoin price action. This indicates that Bitcoin price action in the mid-2020s could go beyond this traditional pattern. Bitcoin price movements appear increasingly influenced by factors such as institutional demand and broader economic conditions.

This article explores Grayscale’s view that the four-year cycle framework is losing its ability to fully explain price movements. He discusses Grayscale’s analysis of Bitcoin cycles, the supporting evidence from Glassnode, and why some analysts believe Bitcoin will always follow the four-year cycle.

The traditional four-year cycle

Bitcoin halvings, which occur approximately every four years, reduce the issuance of new BTC by 50%. In the past, these supply reductions have consistently preceded major bull markets:

• Halving in 2012 – peak in 2013

• Halving in 2016 – peak in 2017

• Halving in 2020 – peak in 2021.

This trend arises from both the built-in scarcity mechanism and investor psychology. Retail traders were the main drivers of demand, and reduced supply led to strong buying.

However, as more of the fixed supply of 21 million Bitcoin is already in circulation, each halving has a smaller and smaller relative impact. This raises the question of whether supply shocks alone can continue to dominate the cycle.

Did you know? Since 2009, halvings have occurred in 2012, 2016, 2020, and 2024. Each of these has permanently reduced Bitcoin’s inflation rate and brought annual issuance closer to zero, while reinforcing BTC’s digital scarcity narrative among long-term holders and analysts.

Grayscale Assessment of Bitcoin Cycles

Grayscale concluded that today’s market differs significantly from past cycles in three ways:

Institution-dominated demand, not retail madness

Previous cycles depended on massive buying by individual investors on retail platforms. Today, capital flows are increasingly driven by exchange-traded funds (ETFs), corporate balance sheets and professional investment funds.

Grayscale observes that institutional vehicles attract patient, long-term capital. This contrasts with the fast-paced, emotion-driven retail seen in 2013 and 2017.

Absence of rally preceding withdrawal

The Bitcoin peaks of 2013 and 2017 were marked by extreme and unsustainable price surges, followed by crashes. In 2025, Grayscale pointed out, the price rise was much more controlled and the 30% decline that followed looks like a standard bullish correction rather than the start of a multi-year bear market.

A macro environment that counts more than halves

In the early years of Bitcoin, price movements were largely independent of global economic trends. In 2025, Bitcoin has become sensitive to liquidity conditions, fiscal policy, and institutional risk sentiment.

Major influences cited by Grayscale include:

• Anticipated changes in interest rates

• Growing Bipartisan Support for US Crypto Legislation

• Inclusion of Bitcoin in diversified institutional portfolios.

These macrofactors exert an influence independent of the halving schedule.

Did you know? When block rewards are halved, miners receive less BTC for the same work. This can cause miners with higher costs to temporarily suspend operations, often resulting in short-term hashrate drops before network rebalancing.

Glassnode data showing a break from classic cycle models

On-chain research from Glassnode shows that the price of Bitcoin has repeatedly deviated from historical norms:

• Long-Term Holder Supply Reaches Historically High Levels: Long-term holders control a greater proportion of the circulating supply than ever before. Continued accumulation limits the amount of Bitcoin available for trading and reduces the supply shock effect typically associated with halvings.

• Reduced volatility despite drawdowns: Although significant price corrections occurred in late 2025, realized volatility remained well below levels seen at turning points in previous cycles. This is a sign that the market is handling large moves more effectively, often through greater institutional participation.

• ETFs and custody demand are reshaping supply distribution: Onchain data shows increasing transfers to custodial wallets linked to ETFs and institutional products. Coins held in these wallets tend to remain inactive, reducing the amount of Bitcoin actively circulating in the market.

A more flexible, macro-linked Bitcoin cycle

According to Grayscale, Bitcoin price behavior is gradually breaking away from the four-year pattern and becoming more responsive to:

• Long-term stable institutional capital

• Improving regulatory environments

• Global macroeconomic liquidity

• Sustained demand linked to ETFs

• A growing group of committed, long-term holders.

Grayscale emphasizes that corrections remain inevitable and can still be severe. However, they do not automatically signal the start of a prolonged bear market.

Did you know? After each halving, the Bitcoin inflation rate drops sharply. After the 2024 halving, annual supply inflation fell below many major fiat currencies and strengthened its comparison to scarce commodities like gold.

Why some analysts still believe in halving models

Some analysts, often citing Glassnode’s historical cycle overlays, continue to believe that halvings remain the primary driver. They argue that:

• The halving remains a fundamental and irreversible reduction in supply.

• Long-term holder activity continues to cluster around periods halved.

• Retail-driven activity could still re-emerge even as institutional participation increases.

These differences of opinion show that the debate is far from settled. The arguments and counterarguments that Bitcoin ignores the four-year cycle reflect an evolving market.

An evolving framework for understanding Bitcoin

Grayscale’s arguments against the dominance of the traditional four-year cycle are based on obvious structural changes. These include growing institutional involvement, deeper integration with global macroeconomic conditions, and lasting changes in supply dynamics. Data from Glassnode and Coinbase Institutional confirm that the current Bitcoin market is operating under more sophisticated forces than past retail-dominated cycles.

As a result, analysts place less emphasis on fixed timing models based on halving. Instead, they focus on on-chain metrics, liquidity trends, and institutional flow indicators. This more refined approach better captures Bitcoin’s ongoing transformation from a fringe digital asset to a recognized part of the global financial landscape.