Cryptocurrency Information Bureau News: Has Bitcoin's four-year cycle really ended? What changes will ETFs and institutional investors bring? A thorough explanation of future price trends! #Bitcoin #Cryptocurrency #ETF
Video explanation
Is Bitcoin's 4-year price cycle over? Experts say the future holds
Hello, this is John from Blockchain Navigator!
Recently, you may have seen the word "Bitcoin" often in the news and on the Internet. Simply put, Bitcoin is "like money that can be used on the Internet" and is attracting attention around the world.
Well, Bitcoin has had a tendency to move in big waves every four years. This is called the four-year cycle. But recently, some people have said that the cycle may be coming to an end. What does this mean? And what do experts think?
Today, I will explain Bitcoin's "4-year cycle" in an easy-to-understand way even for beginners!
What is Bitcoin's "4-year cycle"?
The price of Bitcoin can go up and down like a roller coaster, but if you look closely, you will see that it has a history of creating large peaks and valleys in cycles of roughly four years.
One of the main reasons for this four-year cycle is"Half-life"This is an event called.
- Bitcoins are newly created by performing complex calculations on computers (this is called "mining" or "extraction").
- The amount of newly created Bitcoin is programmed to be halved approximately every four years. This is the "halving."
- If fewer new coins are released into the market, and there are many people who want Bitcoin, the price will tend to rise, right? (Similar to how the price of a product rises when there is less stock in a store.)
Because this halving occurs every four years, it has been thought that the price of Bitcoin fluctuates accordingly, creating a "four-year cycle."
A rough image:
The halving approaches → the supply of new Bitcoin is expected to decrease → the price starts to rise → it reaches a peak → the price settles (falls) after a while → it happens again as the next halving approaches...
Why people say "The four-year cycle may be over"
So why is it said that this familiar "four-year cycle" "may soon be over"?
This has to do with the recent major changes in the Bitcoin market.
- The emergence of Bitcoin ETFs (Exchange Traded Funds):
An ETF is a financial product that anyone can easily buy and sell on a stock exchange, like stocks or gold. Recently, a Bitcoin version of an ETF has appeared and started trading in the United States and other countries.
This has made it easier for individual investors who were previously unfamiliar with Bitcoin investment, and institutional investors (professional investors such as pension funds and insurance companies) who move large amounts of money, to participate in the Bitcoin market.
It is thought that with a lot of new money coming into the market, it may cause the market to move in a different way than previous cycles. - Full-scale entry of institutional investors:
Through the aforementioned ETFs and other such means, "money professionals" known as institutional investors are entering the Bitcoin market in earnest. Because they move very large amounts of capital, they have a tremendous influence on the market. Their investment strategies have the potential to change the course of the market, which has been dominated by individual investors until now.
These new factors could help the Bitcoin market become more mature and move in a more complex manner than the simple cycle that has been driven primarily by the halving so far.
Expert Rational Root: "Maybe it'll be the same this time?"
Some of you may be worried, "So, does that mean the four-year cycle is over after all?"
However, one of the experts featured in this article, Rational Root, says:"No, no, in the end, this situation may not be that different from previous cycles."This seems to indicate the view that...
In an article in Bitcoin Magazine Pro, Rational Root discusses the question, "Will the four-year cycle really break down?" in light of new circumstances such as ETFs and inflows of funds from institutional investors.
Why do we think "maybe nothing will change" when there are so many new changes?
The article doesn't go into detail about why this is the case, but the general idea is that
- The impact of the half-life is huge:
The impact of the "halving", the halving of the amount of new Bitcoin created, is still considered to be the most powerful price driver (a factor that moves prices) because it directly affects the fundamental supply and demand in the market. - New funds may also join the cycle:
New money coming in through ETFs and other sources may eventually move with an awareness of the reduction in supply caused by the halving. If that happens, it could actually strengthen the cycle.
In other words, even if new players or products emerge, the idea is that as long as the fundamental design of Bitcoin, such as its issuance limit (set at 2100 million) and supply adjustment due to halving, does not change, the basic cycle will continue.
Summary: What does the future hold for Bitcoin?
Will Bitcoin's four-year cycle continue, or will it end with a new era? This is a very interesting topic on which experts have differing opinions.
The emergence of new mechanisms such as ETFs and the participation of major players such as institutional investors are undoubtedly having a major impact on the Bitcoin market. However, it can also be said that the "halving" event, which is the foundation of Bitcoin, also has a powerful influence.
Which force will drive the market, or will both intertwine to create new patterns? This is likely to be a very interesting point in watching the Bitcoin market going forward.
John says:
The world of Bitcoin is changing so quickly and is so profound! I am excited to see how the long-standing "four-year cycle" will change (or remain the same) with new technologies and participants. It may be difficult for beginners to understand, but learning about these major market movements may be the first step to understanding Bitcoin and the new shape of the economy. I will continue to provide you with easy-to-understand information!
This article is based on the following original articles and is summarized from the author's perspective:
Is the 4-Year Bitcoin Cycle Over? Rational Root Explains Why
This Time Might Not Be Different