Bitcoin halving failure? 10x Research: The four-year cycle is still there but the anchoring is shifting

10x Research Head of Research Markus Thielen stated in a recent interview that the four-year cycle of Bitcoin has not disappeared; rather, its core drivers are no longer anchored to the halving events. This year, amid the Fed’s rate cuts, Bitcoin has not regained strong upward momentum. The reason is that institutional investors have become the dominant force in the crypto market but are making more cautious decisions. With the Federal Reserve’s policy signals still uncertain and overall liquidity tightening, the pace of capital inflows has significantly slowed.

2013-2021 Peak Reveals Politics as the True Catalyst

(Source: X)

Markus Thielen pointed out on the “Wolf Of All Streets” podcast that the notion of a “broken” four-year cycle overlooks the key issue. In his view, cycles still exist but are no longer primarily driven by Bitcoin’s predefined halving mechanism. Instead, they are increasingly influenced by factors such as the U.S. election timeline, central bank policies, and capital flows into risk assets.

Historical data strongly supports this argument. Bitcoin markets experienced historic peaks in 2013, 2017, and 2021, all occurring in the fourth quarter. The key finding is that these peaks align more closely with presidential election cycles and broader political uncertainties rather than with the timing of Bitcoin halving events, which have shifted on the calendar in recent years.

This correlation is no coincidence. U.S. presidential election years often bring policy uncertainty and market volatility, prompting investors to reassess risk asset allocations after election results are clear. After Obama’s re-election in 2013, policies gradually clarified; Trump’s election in 2017 brought tax cut expectations; Biden’s inauguration in 2021 led to large-scale fiscal stimulus. These political events have a far greater impact on risk assets than Bitcoin halving itself.

Thielen said, “There is currently uncertainty that the party of the sitting president might lose many seats. I think it’s quite possible that Trump could lose the election or the Republicans could lose many seats in the House, which would limit his ability to push forward many of his policy agendas.” This political uncertainty is suppressing Bitcoin’s upward momentum as investors wait for clearer policy signals.

This shift also affects investors’ timing strategies. Thielen suggests that market participants should not anchor their expectations solely on Bitcoin halving events but should focus on political catalysts such as U.S. elections, fiscal policy debates, and monetary environment changes. This perspective fundamentally rewrites the timing framework for Bitcoin investment, shifting from technical to macro-driven.

Why Fed Rate Cuts Have Failed to Boost Bitcoin

Following the Fed’s latest rate cut, Bitcoin is struggling to regain upward momentum, sparking widespread attention. Although rate cuts have historically supported risk assets, Thielen points out that the current environment is different. Institutional investors now dominate the crypto market and are more cautious, especially given the mixed signals from the Fed and tightening liquidity.

This cautious attitude stems from fundamentally different investment logic among institutions. Retail investors might buy immediately on rate cut news, but institutional investors analyze the economic implications deeply. If rate cuts are due to rising recession risks, institutions may choose to reduce risk exposure rather than increase it. Moreover, institutional decision-making processes are more complex, involving approval from investment committees and fund reallocations that can take weeks or months.

Capital inflows into Bitcoin have slowed compared to last year, reducing the upward pressure needed for a strong breakout. Although Bitcoin ETFs continue to attract funds, the inflow rate has declined from initial high levels. This slowdown in capital flow means the market lacks sufficient buying pressure to push prices through key resistance levels. Thielen predicts that without a significant liquidity rebound, Bitcoin will continue to consolidate rather than enter a new parabolic rally.

Three Major Changes in the Bitcoin Market Under Institutional Dominance

Extended Decision Cycles: From retail’s immediate reactions to institutional’s multi-week approval processes, market responses to news are slower but more sustained.

Increased Liquidity Sensitivity: Institutions focus more on the overall liquidity environment rather than single events. The ambiguity of Fed policy signals leads to a wait-and-see attitude.

Rising Political Risk Weight: Institutions incorporate U.S. elections and policy uncertainties into risk models, making political catalysts more important than technical factors.

Arthur Hayes’ Radical View: The Cycle Is Dead

Legendary trader Arthur Hayes offers a more radical perspective. He believes the four-year crypto cycle has ended, not because of waning institutional interest or changes in the halving mechanism. He states that traders relying on historical timing models to predict the end of the current bull market are likely to be mistaken, as these models no longer reflect market trends.

Hayes argues that Bitcoin’s cycle has always been driven by global liquidity rather than artificially set four-year periods. Past bull markets were marked by monetary tightening, especially when dollar and RMB liquidity slowed. He claims that halving is overstated as a causal factor; in reality, it is merely a coincidence. Halving occurs at specific points in liquidity cycles but there is no inherent causal relationship.

Hayes’ view aligns somewhat with Thielen’s, both recognizing that halving is no longer a core driver. However, Thielen believes the four-year rhythm still exists but with shifted anchors, whereas Hayes argues that fixed cycles have become invalid. He suggests markets should abandon time-based forecasts altogether and focus solely on liquidity indicators.

Until liquidity significantly improves, Bitcoin is more likely to remain range-bound and sideways. This outlook provides investors with a clear operational framework: avoid expecting rapid breakouts in the short term and focus on range trading strategies.