Beyond the 4-Year Myth: How Dovish Policy and Institutional Buying Are Rewriting Bitcoin’s 2025 Cycle
Beyond the 4-Year Myth: How Dovish Policy and Institutional Buying Are Rewriting Bitcoin’s 2025 Cycle
Author: Zion Zhao Real Estate | 88844623 | ็ฎๅฎถ็คพๅฐ่ตต
Author's note: Not financial advice, please do your own due diligence.
Bitcoin’s current rally is forcing everyone in my private group chats and even my peers to ask the same question: is the familiar four-year pattern about to end, or are investors once again forgetting how Bitcoin actually breathes? My honest, data-driven answer in late 2025 is: the classic 4-year structure is still visible, but two unusually powerful forces — easier U.S. monetary policy and record-high, ETF-driven institutional demand — are pulling this cycle longer and flatter than 2017 or 2021. That tension is what markets are mispricing right now. Let’s unpack it carefully, stay within compliant commentary, and tie everything back to verifiable sources.
Bitcoin’s 2022–2025 run has now reached the “danger zone” that ended the last two bull markets — roughly 35 months after the bear-market low. In past cycles (2015–2017 and 2018–2021), that point usually marked the handover from explosive expansion to a 12-month contraction that wiped 60–75% off prices. That timing was tightly linked to Bitcoin’s four-year halving rhythm: supply gets cut, price runs for about 18 months after the halving, then the market cools while excess leverage and optimism are flushed out. On that simple template, Bitcoin could top right now.
But this cycle isn’t a carbon copy, and that’s what many investors are missing.
First, the macro backdrop is the opposite of 2017 and 2021. Then, the U.S. Federal Reserve was tightening or clearly preparing to tighten — draining liquidity from the system and making it harder for highly speculative assets to keep rallying. In late 2025, the Fed has already started cutting, markets expect more cuts into 2026, and a Trump-era Fed appointment is widely seen as likely to be more dovish than today’s setup. Easier money means cheaper leverage, more risk appetite and fewer forced sellers — all of which can stretch a crypto bull market rather than snap it on schedule.
Second, this is the first full Bitcoin cycle with large, recurring, largely price-insensitive institutional demand. After the 2024 halving, miners could only produce about 160–170k new BTC a year. At several points in 2025, spot ETFs, ETPs and institutional buyers were absorbing many times that amount. That flips the classic halving story on its head: in earlier cycles, the halving was the main supply shock; now the bigger shock is traditional finance pulling coins off the market faster than miners can create them. When demand is seven-ish times new supply, price doesn’t have to roll over even if the calendar says it’s time.
Third, on-chain valuation signals don’t yet scream “final blow-off.” In 2017 and 2021, market price ran far above realized/on-chain value — the kind of euphoric stretch that always resolves lower. In 2025, those gauges are positive but not extreme. That says we’re in a strong bull market, but not the manic, everyone-piles-in phase that usually precedes a deep drawdown. Put simply: Bitcoin has made new highs, but it hasn’t looked irrational yet.
Put together, you get a more nuanced outlook than “top now, crash next.” A sensible base case is that Bitcoin spends time consolidating in a wide band below its 2025 highs while ETF flows and Fed policy take turns driving sentiment. A classic bear-market reset — 40–55% down to the US$60k–70k zone — is still on the table if flows turn negative or macro shocks hit, because every cycle has eventually corrected hard. But there is also a plausible path to a longer, flatter, late-cycle advance into 2026 if cuts continue and institutional buyers stay engaged. That would make this the first cycle to clearly “break” the neat four-year template without rejecting it entirely.
The trading implication is straightforward: this is an environment for probability management, not prophecy. Traders should respect the historical window that says “risk of topping is higher now,” but they should also watch the live drivers — Fed cuts, ETF inflows/outflows, and on-chain overvaluation — to decide whether to stay long, scale out, or hedge. The worst mistake is to assume the date on the calendar will do the work for you. Cycles still matter, but in 2025 they are sharing the driver’s seat with macro policy and institutional plumbing — and those two forces have never been stronger in Bitcoin’s history.
1. The 4-year cycle the market keeps quoting
Bitcoin’s “four-year cycle” is not folklore; it is a direct by-product of programmed supply cuts — the halvings — that now happen roughly every 1460 days. On April 19–20, 2024 the block reward fell from 6.25 BTC to 3.125 BTC at block ~740,000, cutting new issuance by 50% in a single block. That is confirmed by LSEG/FTSE Russell, Kraken and IG’s halving trackers. (LSEG)
Historically the sequence has looked like this:
Recovery/expansion (~17–18 months after halving): supply shock digests, spot and derivatives demand pick up, price runs far above on-chain “fair” value.
Blow-off / contraction (~12 months): price gets too far ahead of realized value and macro liquidity, leverage liquidates, 60–80% drawdowns follow.
Longer repair (~15–17 months): price and on-chain activity rebuild to prepare for the next halving. This is what we saw post-January 2015, post-December 2018, and post-November 2022.
I often described it as “35 months up, 12 months down.” That’s a good trader’s shorthand for what in reality is “post-bottom to halving to 18-month run to 12-month reset.”
2. Fact-checking the past three bottoms
2015 bottom → 2017 top. Spot BTC traded around US$200 in January 2015 and reached nearly US$20,000 in December 2017. US$10,000 at the bottom bought you ~50 BTC; 50 × 20,000 = US$1,000,000. That claim is correct.
2018 bottom → 2021 top. BTC bottomed near US$3,200–3,300 in December 2018 and topped in November 2021 near US$69,000. US$10,000 ÷ 3,200 ≈ 3.125 BTC; 3.125 × 69,000 ≈ US$215,000. That’s consistent with the “US$200,000+ in 35 months” line.
2022 bottom → 2025 highs. Spot ETFs, the April 2024 halving, and a friendlier U.S. administration pushed Bitcoin to new all-time highs between US$109,000 and US$124,000 in May–July 2025. Reuters, Investing.com and Business Insider all reported those prints. (Reuters)
The 2022 bear-market low was around US$15,500–16,000. A move to US$124,000 is almost exactly +700–800%. Today, however, Bitcoin is back near US$101,000–103,000 after Fed-related wobbling and ETF flow pauses, so the gain measured right now is closer to +540–650%. (The Economic Times)
So the historical headline still stands: three cycles in a row gave you 35-ish months of very large upside. We have now entered that same time window in which the last two bull runs ended.
3. Why this time could have topped already — and why it hasn’t
As I always preach, follow the money. People lie, but they don't (rarely) lie with their own money. Follow the paper trails, follow liquidity. Be ahead of the curve. If we only ran the 2016 and 2020 playbooks, we would circle late 2025 in red and say: “That’s it. Halving + 18 months → peak → 12-month bleed.” And to be fair, on-chain profits are big, ETF inflows are now two-way, and some analysts are already drawing 2021-style topping analogies. (Investors.com)
But two features of this cycle really are different:
a. Monetary policy is easing, not tightening
In 2017, the Federal Reserve was hiking from 0% toward 2.5%, steadily withdrawing liquidity — exactly when Bitcoin was trying to do its vertical move. In 2021, the Fed was loudly pivoting to inflation-fighting, and forward curves started to price in aggressive tightening; Bitcoin topped soon after.
In late 2025, we are in the opposite posture:
The Fed has already cut at least twice in 2025, taking the funds rate down toward 4.0–4.25% and then 3.75–4.0%, because growth and jobs softened and because data went dark during the U.S. shutdown. (JPMorgan)
Goldman Sachs, the OECD and others now expect more cuts into 2026, taking policy toward the low-3% area. That view is reinforced — not weakened — by pressure from President Trump, who has publicly argued for faster easing and has clashed with the Fed over how restrictive policy should be. (Reuters)
That is the exact opposite macro backdrop to 2017 and 2021. Cheaper money + falling term premium = more oxygen for risk assets, including BTC.
b. Institutional demand now dwarfs new supply
This is the part I always emphasized, and the web data backs it up:
New issuance after the April 19, 2024 halving is about 3.125 BTC × 144 blocks/day ≈ 450 BTC/day, or ~164,000 BTC/year. That’s your maximum new supply for the epoch. (LSEG)
U.S. spot Bitcoin ETFs plus Europe/Asia ETPs brought in hundreds of millions of dollars a day around key rallies in 2025 — e.g. US$524 million on 11 Nov alone — which at US$110,000/BTC is thousands of coins per day. Even allowing for outflow days, 2025 saw well over US$1 trillion in fiat inflows into BTC channels, according to Chainalysis-summarized coverage. (Value The Markets)
By July 2025, Bitcoin made new highs above US$120,000 while exchange balances fell to multi-year lows, meaning coins were being pulled off exchanges faster than miners could replace them. That is exactly what an institutional supply squeeze looks like. (CryptoDnes.bg)
The key takeaway here is — “demand is 7× new supply” — is directionally right, even if the exact 975,000-vs-135,000 numbers can’t be verified from public ETF dashboards. The main point stands: for the first time, structurally price-insensitive buyers (ETFs, corporates, reserves) are bigger than the halving itself. That was not true in 2017 or 2021. (FXEmpire)
4. On-chain says “bullish, but not euphoric”
One of the best ways to see whether a Bitcoin rally is “late” is to look at MVRV — market value to realized value. Glassnode has shown for years that cycle tops tend to happen when MVRV shoots into extreme bands, which correspond to “price is way ahead of what people actually paid.” In 2017 and 2021, that meant extremes around or above 2.5–3.0 on some adjusted views, and other valuation overlays stretched to 0.8–0.9 above long-term value — exactly what I quoted for the 2017 and 2021 highs. (Glassnode Studio)
In 2025, however:
MVRV spent much of the year around 1.3–1.8, which Glassnode itself described as “positive but not overheated,” and even dipped to early-2025 levels in November. (insights.glassnode.com)
On-chain commentaries in October–November 2025 repeatedly said “there was no euphoria at the top,” which mirrors the my point. (Nexo)
Profit-taking has been large in dollars — ~US$85 billion realized by 2025 vs 2021 — but relative to a US$2.3–3.8 trillion crypto market, it has not yet forced a top. (Bitget)
So from an on-chain perspective, this doesn’t yet look like a classic terminal blow-off. It looks more like a maturing bull market that is pausing under 2025’s 120–124k highs while ETF flows catch their breath and the Fed decides how fast to cut.
5. So… are investors “wrong” about what’s next?
They can be wrong in two opposite ways:
Old-cycle rigidity. If you insist that “we always top 35 months after the bottom,” you will be tempted to short or de-risk right now. That was a great strategy in December 2017 and November 2021 because liquidity was being withdrawn. It is a weaker strategy in November 2025 because liquidity is being added and because structural buyers are live in the tape. Macro really does matter this time. (Goldman Sachs)
New-cycle complacency. If you assume “ETF flows + Trump + halving = super-cycle,” you can ignore the reality that Bitcoin is already down 15–20% from its 2025 highs and that ETF flows have printed outflow weeks. Price stalling around US$100k at the same time MVRV cools and Fed cuts slow could be the market whispering: “we need to consolidate before the next leg.” That’s exactly what several November notes are saying. (Binance)
The balanced read — and the one I was nudging toward — is:
Yes, the 35-month window is here, so risk of a cyclical top is real. But two historically large tailwinds — easier policy and institutional absorption that outstrips post-halving supply — give this cycle a higher-than-usual probability of stretching, grinding or even double-topping into 2026. (MarketWatch)
Bernstein analysts said almost exactly this in September: the bull run “could defy history and last until 2027,” but that’s optimistic and probably capped in the US$140–150k zone if macro support fades. That’s a good outside view to cite when you present this essay as the author. (MarketWatch)
6. Scenario map for late 2025–2026
Base case – “extended plateau.”
BTC oscillates between US$95,000 and US$125,000 while:
the Fed keeps trimming toward 3.5%,
ETFs see alternating weeks of US$200–500m inflows and occasional outflows,
and on-chain MVRV stays below parabolic levels.
Volatility compresses, alts lag, but the structural bull market is not broken. (Reuters)
Classic reversion – “12-month drain.”
A shock — new tariffs, a U.S. data accident, or a sudden ETF outflow streak — pushes BTC back through US$90,000 (we’ve already seen a 20% drop in early 2025 on tariff worries). If that break is sustained and MVRV rolls further, the market can absolutely do a 40–55% cyclical drawdown into the high-50k/low-60k area, which would rhyme with 2018 and 2022 but from a much higher base. This is why I would like to emphasize that I could be completely wrong about this” — trading is about living with that tail. (markets.businessinsider.com)
Bullish extension – “late cycle blow-off.”
If ETF inflows re-accelerate the way they did on 11 Nov (US$524m in a day) and the White House/Fed pairing in 2026 leans even more dovish, then the Bernstein-style US$150–200k targets come back into view. That would be the latest and longest top in Bitcoin’s history, fully breaking the neat 4-year template. (Value The Markets)
7. Trading and risk-management implications
At this final note: this is about odds, not certainties. A few professional guardrails I would like to reinforce (not financial advice):
Anchor to structure, not to headlines. As long as BTC holds above the post-summer 2025 value cluster (US$94–105k), the market is treating this as consolidation, not as a topping pattern. (Binance)
Let on-chain overvaluation guide de-risking. If MVRV or similar realized-value spreads suddenly jump to 2017/2021 levels, then the old 12-month-down rule regains force. (Glassnode Studio)
Respect ETF flow direction. We now have daily, regulated, US-listed spot products that can swing US$300–700m in or out. That is your new “miner sell-pressure” indicator. A week of outflows in a falling macro tape is your cue to get lighter. (Yahoo Finance)
Position size for a 40–60% air pocket. Every single cycle has given you one. Even from US$100k, a 50% drawdown still leaves BTC at US$50k — vastly above 2022 levels — but it destroys over-levered accounts. That is why the speaker emphasized risk management.
Keep macro on the screen. In this cycle, the Fed, the White House and trade/tariff policy are all explicitly crypto-linked — up to and including a federal Bitcoin reserve concept. That political overlay did not exist in 2017. (Reuters)
8. Conclusion
So are investors “wrong” about what’s coming next for Bitcoin? They’re wrong if they think the clock alone will kill this bull market. The 35-month window that ended the past two runs is here, but the backdrop is nothing like 2017 or 2021. We have:
post-halving supply at the lowest ever,
ETFs and treasuries absorbing more than miners can print,
a Fed that is cutting, not hiking,
and a politically pro-crypto U.S. administration signalling even looser policy into the 2026 Fed-chair transition. (Reuters)
That cocktail makes an outright, immediate 75% collapse less likely than in past cycles — not impossible, but less likely. What is more likely is a slower, institution-dominated, policy-sensitive topping process that can run longer — and frustrate both perma-bulls and cycle-purists.
Markets move in cycles, but your family’s capital shouldn’t guess.
I spend hours daily studying macro, crypto, equities and Singapore regulations so you don’t have to, and I translate that into clear, lawful, property-led strategies for international, China, SEA and local buyers. If you’re building a portfolio that is less volatile than Bitcoin yet still offers capital appreciation and dividend-like rental income, Singapore real estate remains a core anchor. Connect with me for a confidential, data-backed consultation that respects your risk profile, long-term objectives, and today’s shifting policy and tax landscape across key jurisdictions for families, funds and entrepreneurs globally.
Disclaimer
This essay is for educational and informational purposes only. It is not financial, legal, tax or investment advice and should not be used as a sole basis for investment decisions. Digital assets are volatile and you should do your own due diligence and follow the regulations of your own jurisdiction. All politically sensitive statements are attributed to public reporting to avoid ่ฟ่ง.
References (APA)
Bernstein Research. (2025). Bitcoin’s bull run could defy history and last until 2027. (MarketWatch)
Glassnode. (2023). Mastering the MVRV Ratio. (insights.glassnode.com)
Glassnode. (2025, April 2). The week on-chain: Rippling away. (insights.glassnode.com)
Investing.com. (2025, October 3). Bitcoin price today: up above $120k on seasonal optimism. (Investing.com)
Investopedia. (2025, October 2). Understanding Bitcoin halving: Impact on price and investment strategies.(Investopedia)
Kraken. (2024, September 4). The history of Bitcoin halving: Timeline and 2024 insights. (Kraken)
LSEG (FTSE Russell). (2025). Bitcoin halving 2024 – overview and market impact. (LSEG)
OECD. (2025). United States: Monetary policy, growth and tariff risks. (Financial Times)
Reuters. (2025, May 21). Bitcoin rose to its highest level on record on Wednesday… (Reuters)
Reuters. (2025, July 14). Bitcoin climbs to record $123,000 as investors eye U.S. policy boost. (Reuters)
Reuters. (2025, Oct. 20). Fed still poised to cut rates, but worries mount over U.S. data vacuum. (Reuters)
Reuters. (2025, Nov. 7). Bitcoin holds steady between $101K–$102K… (The Economic Times)
U.S. Bank / J.P. Morgan / Goldman Sachs. (2025). Fed rate-cut outlooks for late 2025. (U.S. Bank)
ValueTheMarkets. (2025, November 11). Institutional investment surges as Bitcoin funds see significant inflows. (Value The Markets)
Comments
Post a Comment