By Matt Hougan, Chief Investment Officer, Bitwise
Translated by Luffy, Foresight News
In my meetings with institutional investors over the past few weeks, the most frequent question I've been asked is: Does Bitcoin's four-year cycle still hold any relevance?
The so-called four-year cycle refers to the historical pattern in Bitcoin's price action characterized by "three years of gains followed by a sharp decline in the fourth year."
This question is crucial because, according to the logic of this cycle, next year is projected to be a challenging one for Bitcoin and the broader crypto market.
While I cannot predict crypto prices for next year with certainty, I believe it is unwise to blindly assume the four-year cycle will mechanically repeat itself. After all, this cycle is not some immutable law handed down by the crypto gods. It emerged from three specific drivers:
The Bitcoin Halving: The mining reward on the Bitcoin blockchain halves approximately every four years.
Interest Rate Hikes: Sharp increases in interest rates in both 2018 and 2022 contributed to crypto market pullbacks.
Boom-and-Bust Market Cycles: The down years for crypto (2014, 2018, 2022) all followed exceptionally strong years. For instance, Bitcoin surged 5,530% in 2013, 1,349% in 2017, and 57% in 2021. During these periods of euphoria, fraud and speculative excesses built up. The bursting of these bubbles—such as the ICO crackdown in 2018 and the collapse of FTX in 2022—directly triggered the subsequent market crashes.
Today, these three drivers are either significantly weaker or pointing in the opposite direction compared to previous cycles. The impact of the Bitcoin halving is less pronounced than it was four years ago; interest rates in 2026 are more likely to decline than rise; and the crypto market in 2025 has not experienced the kind of parabolic, euphoric run-up seen in prior cycles.
Meanwhile, more decisive forces—particularly the accelerating institutional adoption and evolving regulatory clarity—are poised to take center stage in 2026. In our recently published report, "The Year Ahead: 10 Crypto Predictions for 2026," we forecast that Bitcoin will reach a new all-time high next year. I still believe this is the most likely outcome.
What Replaces the Four-Year Cycle?
If the four-year cycle is indeed over, a logical question follows: What new mental model should we adopt for the crypto market in 2026 and beyond?
The four-year cycle provided clear guidance for investors. Knowing whether the market was in a recovery phase, a bull market, or a crypto winter helped investors stay the course during downturns and maintain perspective during upswings.
So, what framework can replace it now?
The answer: The Long War.
I know—it doesn't sound as catchy as the "four-year cycle." But hear me out, because I believe this is the true nature of the market today.
The Long War describes a prolonged struggle between two forces: a powerful, persistent, and gradual positive driver, and an intermittent, sharp, but ultimately unsustainable negative shock.
The positive drivers gaining momentum today include accelerating institutional adoption, improving regulatory clarity, concerns about fiat currency debasement, and the rise of real-world use cases like stablecoins and asset tokenization.
These trends aim to disrupt deeply entrenched systems like capital markets, global payments, and international monetary regimes—a process that will inevitably take a decade or more to fully unfold. Early signs are already visible: billions flowing into crypto ETFs, crypto-related legislation advancing in Congress, and the rapid growth of stablecoin and tokenization markets.
But progress never comes without resistance. Potential negative shocks include macroeconomic disruptions, deleveraging events, and black swans like hacks, fraud, or blow-ups. These shocks typically play out over weeks, months, or quarters.
Overall, the positive drivers have far greater long-term impact than the negative shocks, but the negative shocks can unfold much faster, temporarily overwhelming the positive forces. The market sell-off on October 10, 2025, is a prime example: a macro shock triggered massive deleveraging of crypto positions, leading to a sharp, rapid decline.
This dynamic of the Long War explains the deep divide in today's crypto market: retail investors are deeply pessimistic, while many institutions remain bullish. The difference lies in their time horizons. Retail is focused on the aftermath of the October deleveraging event; institutions are looking ahead to a future where stablecoins reach $3 trillion in assets by 2030.
Both perspectives are valid—they're just operating on different time scales.
What the Long War Means for Investors
I've been using the "Long War" framework to navigate the market for the past few months, and it has proven incredibly useful. This framework suggests the market will exhibit the following characteristics:
Attractive, but not outrageous, long-term returns
Lower overall volatility
Periodic pullbacks of 20%–40%
This means investors must take every pullback seriously, as they can last for a meaningful period. However, as long as the fundamentals remain strong, one can be confident that prices will eventually recover.
Looking back, I believe the crypto market entered the Long War phase in January 2024, with the approval of spot Bitcoin ETFs. This milestone unlocked the wave of institutional investment, a trend I expect to play out over the next decade. Indeed, since the ETFs launched, Bitcoin is up 93%, despite experiencing three separate pullbacks exceeding 20%.
I expect this return profile to persist for the foreseeable future. The Long War may lack the drama of past boom-and-bust cycles, but it signifies a deeper maturation of the crypto industry. When an asset class grows up, the era of the Long War begins.