Finance

Bitcoin’s Dip: Is the Four-Year Cycle Still Dictating Crypto’s Fate, or Has Wall Street Taken Over?

Crypto markets fell due to the four-year cycle theory and Trump’s tariff threats.

October 17, 2025, 9:06 PM

A miner with a pickaxe excavates digital gold from a dark mine, representing the concept of Bitcoin mining.

A miner uses a pickaxe to excavate digital gold, representing the concept of Bitcoin mining in a dark, symbolic mine. By MDL.

Executive Summary

Cryptocurrency markets are declining due to a dual pressure from traders following the historical “four-year cycle” and renewed geopolitical tensions following President Trump’s threats of tariffs against China.

While some traders adhere to the four-year cycle theory, many analysts argue it is becoming outdated due to the market’s maturation, increased institutional adoption, and the growing influence of exchange-traded funds (ETFs).

External macroeconomic factors, particularly President Trump’s recent threat to reignite trade disputes with China, played a significant role in the market plunge, triggering a record $19 billion in liquidations.

The Story So Far

The recent cryptocurrency market downturn is largely driven by a tension between some traders adhering to an outdated historical “four-year cycle” playbook, which anticipates a post-halving market correction, and the market’s increasing maturation with institutional adoption and ETFs. This internal dynamic is further compounded by external macroeconomic pressures, specifically President Trump’s recent threats of tariffs against China, which directly triggered significant liquidations.

Why This Matters

The recent cryptocurrency market decline signals a significant evolution, as external macroeconomic and geopolitical events, such as President Trump’s tariff threats against China, are increasingly powerful drivers, potentially overshadowing traditional crypto-specific cycles. This shift suggests a maturing market, now heavily influenced by institutional adoption and ETFs, is becoming more integrated with traditional finance and thus more susceptible to broader global economic and political volatility.

Who Thinks What?

Some traders and analysts believe the current cryptocurrency market decline is part of a historical “four-year cycle,” where Bitcoin typically experiences a downturn after peaking approximately one year post-halving, leading to “mechanical selling” based on this established pattern.

Many analysts argue that the classic four-year cycle is outdated, citing the cryptocurrency market’s maturation through institutional adoption, the influence of ETFs, and the diminished impact of miner rewards, suggesting that external macroeconomic factors like President Trump’s tariff threats are now more significant drivers of market volatility.

Cryptocurrency markets have experienced significant declines this week, with Bitcoin, Ethereum, and XRP all seeing notable drops. This downturn is largely attributed to a dual pressure: some traders reportedly adhering to the historical “four-year cycle” playbook, anticipating a market correction, alongside renewed geopolitical tensions following President Trump’s recent threats of tariffs against China, which triggered a record $19 billion in liquidations last Friday.

The Four-Year Cycle Debate

Historically, Bitcoin’s price movements have often followed a four-year cycle, typically peaking approximately one year after its halving event—a quadrennial reduction in miner rewards—and subsequently experiencing a decline. With Bitcoin reaching a then-record high of $67,000 in November 2021, some market participants believe the current period aligns with the cycle’s expected downturn.

Matthew Nay, a research analyst at Messari, suggested that a portion of the recent sell-off stems from traders who remain committed to this four-year cycle theory. Jonathan Morgan, lead crypto analyst at Stocktwits, further elaborated, describing this as “mechanical selling” by retail traders who operate on the expectation of such a cycle. Jasper De Maere, a desk strategist at Wintermute, echoed this sentiment, noting that “a lot of retail still trades off that old playbook: buy before the halving, sell when it doesn’t moon.”

Market Maturation and External Factors

Despite some traders’ adherence to the historical pattern, many analysts argue that the classic four-year cycle is becoming outdated. De Maere believes the strategy is “outdated,” stating that “the halving just doesn’t move the needle anymore; miner rewards are tiny compared to total trading volume.” Nay, for instance, personally anticipates Bitcoin could reach new all-time highs before the end of the year.

Analysts point to the cryptocurrency market’s evolution, citing growing Wall Street and institutional adoption, the increasing influence of exchange-traded funds (ETFs), and the diminished impact of miner rewards compared to overall trading volume. Morgan emphasized that “ETFs, institutional flow, and derivatives dwarf that effect” of miner rewards, suggesting the market’s dynamics have matured beyond its earlier, simpler models.

Beyond the cycle debate, external macroeconomic factors have also played a significant role in the recent market volatility. President Trump’s recent threat to reignite trade disputes with China directly preceded the crypto market plunge last Friday, which saw a record $19 billion in leveraged positions liquidated, further contributing to the current decline.

Key Market Drivers

The current cryptocurrency market landscape is grappling with a tension between traditional trading patterns, particularly the four-year cycle theory, and the increasing influence of institutional investment and broader macroeconomic events. While some traders continue to act on historical expectations, a growing consensus among analysts suggests that the market’s maturation and integration with traditional finance are introducing new, more complex drivers for price movements, such as the impact of President Trump’s policy announcements.