Bitcoin Falls Below $61,000, Is It Just a Repeat of the Four-Year Cycle?
Bitcoin Falls Below $61,000, Is It Just a Repeat of the Four-Year Cycle?
As Bitcoin (BTC) recently plunged to its lowest level in 16 months, spreading fear across the market, an analysis suggests that the primary cause of the sharp decline is the cryptocurrency market’s unique four-year cycle. Asset manager Bitwise assessed that the current correction has already occurred three times in the past and that Bitcoin’s fundamental scarcity remains intact.
According to CNBC on February 11 (local time), Matt Hougan, Chief Investment Officer (CIO) of Bitwise Asset Management, said on the ETF Edge program that while there is no single cause explaining Bitcoin’s current price retreat, the biggest catalyst behind the decline is the four-year cycle. He emphasized that this pattern has already occurred three times in the history of the crypto market, suggesting that the present downturn is part of a recurring cycle.
Hougan also analyzed that, beyond the four-year cycle, multiple factors are fueling the downward trend. Investors have increasingly favored other popular assets such as gold and artificial intelligence (AI)-related stocks, while concerns over quantum risk and fears surrounding Kevin Warsh, a nominee for the Federal Reserve Board, have also weighed on the market. He explained that in a bear market, all these sources of anxiety tend to be amplified and reflected in prices.
Bitcoin reached an all-time high of $126,279 last October but has been on a downward trajectory since. Last Thursday, it broke below the $61,000 level, falling to its lowest point in about 16 months. When Hougan last appeared on the program in November, Bitcoin had slipped below $90,000 for the first time since April, but the decline has since deepened further.
Hougan diagnosed that the current crypto market is dominated by self-fulfilling prophecies but stressed that financialization through exchange-traded funds (ETFs) does not fundamentally alter Bitcoin’s scarcity thesis. He asserted that it may simply take time for positive developments to surface and reiterated that Bitcoin’s fixed total supply of 21 million coins remains unchanged. He also maintained a long-term perspective, noting that demand in the derivatives market inevitably flows into the spot market.
Meanwhile, Bitwise, which manages over $15 billion in assets, attempted to expand its market presence by launching the Bitwise Solana Staking ETF on October 28, but performance has been weak. The fund has fallen about 57% since its launch, while Solana (SOL) has also declined more than 30% this year, continuing to struggle.
Disclaimer: This article is for investment reference only, and no responsibility is assumed for any investment losses incurred based on it. The content should be interpreted solely for informational purposes.
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