ETF inflows and corporate adoption could rewrite Bitcoin’s market playbook, but analysts remain divided on whether the halving-driven cycle is truly over.
Bitcoin’s decade-old reputation for following a predictable four-year cycle is facing its most serious test yet. According to Fundstrat Chief Investment Officer Tom Lee, the growing weight of institutional capital, from spot Bitcoin ETFs to corporate treasuries, may weaken the once-reliable halving-driven market rhythm.
In a recent interview with entrepreneur Mario Nawfal, Lee argued that consistent inflows from institutional buyers are now offsetting the supply shocks that halving events used to generate. “Equity market liquidity has ended Bitcoin’s traditional four-year cycle,” said Lee, who also serves as Chairman of mining firm Bitmine.
Halving cycles and institutional flows
For much of Bitcoin’s history, the market’s behavior could be mapped with uncanny precision. Every four years, halving events cut mining rewards in half, triggering a surge to new highs followed by deep corrections, the infamous “crypto winters.”
But Lee says 2024 marked a turning point: ETFs have normalized large-scale Bitcoin allocations, while corporations have added BTC to balance sheets, creating structural inflows that smooth out past boom-and-bust dynamics.
According to CoinShares’ weekly flows report, Bitcoin ETFs have attracted over $14 billion in net inflows since launch, providing a steady stream of demand absent in earlier cycles. Corporate buyers like Strategy, which now holds over 250,000 BTC on its balance sheet, also contribute to this structural shift.
Pierre Rochard, CEO of The Bitcoin Bond Company, echoed this sentiment in a recent post on X (formerly Twitter), noting that with only 5% of Bitcoin supply left to be mined, halving events carry less weight than in earlier cycles. “The traditional cycle has lost relevance,” Rochard argued, pointing instead to institutional demand and macroeconomic liquidity as dominant forces.
Historically, halving events reduced miner rewards by 50%, removing millions in BTC supply each cycle. In 2012, rewards dropped from 50 to 25 BTC per block, triggering the 2013 bull run. But today, with fewer than 1.1 million BTC left to mine, these supply shocks are marginal compared to ETF demand that can absorb thousands of coins per day.
Diverging views on the end of the cycle
Not all analysts agree that the four-year cycle is obsolete. On-chain data provider Glassnode recently suggested that cycle patterns remain visible, pointing to recurring supply dynamics and miner behavior that still exert influence on price.
Others, however, believe the structural transformation is clear. Jason Dussault, CEO of Intellistake.ai, told CryptoNews that “the halving maintains relevance, but it’s no longer the primary driver.” He emphasized that Bitcoin now reacts as much to interest rate policy, ETF inflows, and equity markets as it does to its own coded scarcity.
This shift is supported by Bitwise CIO Matt Hougan, who in July said the traditional halving framework may give way to a more extended, sustainable growth phase. He cited the passage of the GENIUS Act as pivotal, enabling Wall Street to expand crypto-based financial products and institutionalize capital flows.
What’s at stake for traders
If Lee and his peers are correct, investors may need to rethink long-standing strategies built around the four-year halving cycle. Relying solely on supply-driven narratives could leave traders blindsided by the far greater influence of global liquidity conditions, regulatory frameworks, and institutional demand.
At the same time, the persistence of cyclical behavior cannot be fully dismissed. Bitcoin remains tied to factors beyond its own design.
Risk considerations
High volatility is inherent to Bitcoin trading, and while institutional adoption may dampen extremes, it also introduces new risks tied to regulatory oversight, ETF management structures, and macroeconomic shocks. Sudden ETF outflows, regulatory crackdowns, or liquidity shocks in equities could cause sharp declines. Traders using leverage face amplified risks, and past performance, including halving-driven rallies, should not be considered reliable indicators of future results.
Gunel Ismayilova
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