The Bitcoin four-year cycle has ended, replaced by a more predictable two-year cycle.

The core of the new cycle is the cost basis and profit and loss situation of ETF holders. Fund managers face annual performance pressure, which may trigger concentrated buying and selling actions, forming price inflection points. This article is based on a piece by Jeff Park, organized, translated, and written by ForesightNews. (Background: Texas, USA, invested $5 million to buy BlackRock's IBIT: DAT after it cooled down. Can SBR take over and reignite the Bitcoin bull run?) (Context: Nobel Prize-winning economist warns: Trump's trade is failing, and the Bitcoin crash is the reason.) Bitcoin has historically followed a four-year cycle, which can be described as a combination of mining economics and behavioral psychology. Let us first review the implications of this cycle: each halving mechanically reduces new supply and tightens miner profit margins, forcing weaker participants out of the market, thereby reducing dumping pressure. This, in turn, reflexively pushes up the marginal cost of new BTC, leading to a slow but structural supply tightening. As this process unfolds, fervent investors anchor on the predictable halving narrative, creating a psychological feedback loop. The loop is: early positioning, price increase, media attention going viral, retail investor FOMO, ultimately leading to leveraged mania and ending in collapse. This cycle is effective because it combines programmatic supply shocks with seemingly reliable reflexive herd behavior triggers. But this is the past Bitcoin market. Because we know that the supply side of the equation is weaker than ever before. Bitcoin's circulating supply and declining marginal inflation effects. So what expectations should we have for the future? I propose that in the future, Bitcoin will follow a 'two-year cycle', which can be described as a combination of fund manager economics and behavioral psychology dominated by ETF footprints. Of course, I make three arbitrary and controversial assumptions here: * Investors are evaluating their investments in Bitcoin within a one-to two-year timeframe (rather than longer, as most asset management companies operate under the context of liquid fund management. These are not the closed structures of private equity / venture capital holding Bitcoin. It also unceremoniously assumes that financial advisors and registered investment advisors operate under similar frameworks); * In terms of 'new sources of liquidity injections', the flow of funds from professional investors through ETFs will dominate Bitcoin's liquidity, and ETFs will become the proxy indicator to track; * The selling behavior of veteran whales remains unchanged / is not considered as part of the analysis, and they are now the largest supply determiners in the market. In asset management, there are several important factors that determine fund flows. The first is co-owner risk and year-to-date profit and loss. Regarding co-owner risk, this refers to worries about 'everyone holding the same thing', so when liquidity is one-sided, everyone needs to make the same trades, exacerbating potential trends. We typically see these phenomena in sector rotation (thematic concentration), short squeezes, pairs trading (relative value), and error-prone merger arbitrage / event-driven situations. But we also often see this in multi-asset domains, such as in CTA models, risk parity strategies, and of course in fiscal-driven trades where stocks represent asset inflation. These dynamic factors are difficult to model and require a lot of proprietary information about positions, making it hard for ordinary investors to access or understand. However, the second point of year-to-date profit and loss is easy to observe. This is a phenomenon of the asset management industry operating on a calendar year cycle, because fund fees are standardized based on performance as of December 31 each year. This is especially evident for hedge funds, which need to standardize their accrued interests before the end of the year. In other words, when volatility increases as the year-end approaches, and fund managers do not have enough 'locked-in' profit and loss as a buffer from earlier in the year, they become more sensitive to selling their riskiest positions. This relates to whether they can obtain another opportunity in 2026 or be fired. In 'Fund Flows, Price Pressure, and Hedge Fund Returns', Ahoniemi & Jylhä recorded that capital inflows mechanically push up returns, which attract additional capital inflows, ultimately reversing the cycle, with the complete return reversal process taking nearly two years. They also estimate that about one-third of hedge fund reports are actually attributable to these fund flow-driven effects rather than the manager's skill. This creates a clear understanding of potential cyclical dynamics, indicating that returns are largely shaped by investor behavior and liquidity pressure, rather than solely determined by the underlying strategy performance, which determines the latest fund flows into the Bitcoin asset class. Therefore, considering this, imagine how fund managers assess positions like Bitcoin. Facing their investment committees, they are likely arguing that Bitcoin's annual compound growth rate is about 25%, and therefore it needs to achieve over 50% compound growth within that timeframe. In Scenario 1 (from establishment to the end of 2024), Bitcoin has risen 100% in one year, which is great. Assuming Saylor's proposed future 30% annual compound growth rate over 20 years is the 'institutional threshold', then achieving something like this in one year translates to 2.6 years of performance. But in Scenario 2 (from early 2025 to now), Bitcoin has fallen 7%, which is not so good. These are investors who entered on January 1, 2025, and are now in a loss position. These investors now need to achieve over 80% returns in the next year, or 50% returns in the next two years to meet their threshold. In Scenario 3, those who held Bitcoin from establishment until now / the end of 2025 have seen their returns rise by about 85% over approximately two years. These investors slightly exceed the 70% return required to achieve a 30% annual compound growth rate within that timeframe, but it is less than what they observed at this point when they looked at it on December 31, 2025, which raises an important question for them: should I sell now to lock in profits, harvest my performance, and win, or should I let it run longer? At this point, rational investors in the fund management business would consider selling. This is due to the reasons I mentioned above, namely * fee standardization * protecting reputation * the combination of demonstrating 'Risk Management' as a premium service of continuous flywheel effect. So what does this mean? Bitcoin is now approaching an increasingly important price of $84,000, which is the total cost basis of inflows into ETFs since its establishment. However, looking at this picture alone is incomplete. Look at this chart from CoinMarketCap, which shows the monthly net fund flows since its establishment. You can see here that most of the positive profit and loss comes from 2024, while almost all ETF fund flows in 2025 are in a loss position (except for March). Given the fact that the largest monthly fund inflow occurred in October 2024, when Bitcoin's price had already reached $70,000. This can be interpreted as a bearish pattern, as those who invested the most at the end of 2024 but have yet to achieve their return thresholds will face decision points in the coming year as their two-year deadline approaches, while those investors who invested in 2025 will need to perform well in 2026 to catch up, which may lead them to preemptively stop loss and exit, especially if he…