Policy Forces Reshape Bitcoin Trading as Four-Year Cycle Weakens

The structure of Bitcoin’s market has historically followed a predictable four-year rhythm, anchored by the halving event which halves miner rewards and creates a supply shock. This cyclical nature defined boom and bust periods for over a decade. However, the last two years have marked a profound pivot, suggesting that this inherent cycle is rapidly diminishing in influence, overtaken by powerful, policy-driven macroeconomic and regulatory forces.

The primary catalyst for this shift is the mass institutionalization of Bitcoin. The landmark approval and success of spot Exchange-Traded Funds (ETFs) in major jurisdictions fundamentally altered the demand curve. Unlike the halving, which is a periodic supply constraint, ETFs introduce a constant, systematic demand mechanism directly tied to traditional financial rails and regulatory compliance. This influx of institutional capital, managing billions of dollars under strict regulatory mandates, now exerts a daily influence far exceeding the periodic volatility caused by supply-side dynamics.

Furthermore, global regulatory clarity, such as the implementation of MiCA (Markets in Crypto Assets) in Europe and the development of clear custody rules worldwide, standardizes Bitcoin as an investable asset rather than a speculative fringe commodity. This inclusion brings Bitcoin directly into the crosshairs of traditional monetary policy, interest rate decisions, and geopolitical stability—factors that dominate conventional asset class performance.

The consequence is a market environment where Bitcoin is increasingly correlated with broader risk-on assets, and its price action responds more acutely to Federal Reserve statements, treasury yields, and ETF flow data than to pre-programmed blockchain events. While the halving remains a crucial supply mechanism, its role has shifted from being the primary price driver to being a component within a much larger, policy-governed financial system. The new normal for Bitcoin trading is defined by institutional adoption and regulatory frameworks, signaling the end of the purely cyclical, retail-dominated era.

Source: Policy Forces Reshape Bitcoin Trading as Four-Year Cycle Weakens