Will Trump's new crypto policy break BTC's four-year market cycle?

Author: Mark Mason, Bitcoin Magazine; Translator: Deng Tong, Golden Finance

The bitcoin market has long been characterized by its seemingly immutable four-year cycle of three-year price surges followed by a sharp correction. However, a major shift in Washington policy under President Donald Trump could break this cycle and usher in a new era of long-term growth for the cryptocurrency industry.

Matt Hougan, chief investment officer of Bitwise Asset Management, recently posed an interesting question: Can Trump's executive order break the four-year cycle of cryptocurrency? His answer, while subtle, leans toward the affirmative.

Four-Year Cycle

Hougan clarified his personal opinion that the four-year Bitcoin market cycle is not driven by Bitcoin’s halving event. He said, "People try to link it to Bitcoin's four-year 'halving', but these halvings are inconsistent with the cycle and occurred in 2016, 2020 and 2024."

Source: Bitwise Asset Management. Data range is December 31, 2010 to December 31, 2024.

Bitcoin’s four-year cycle has historically been driven by a combination of investor sentiment, technological breakthroughs, and market dynamics. Typically, bull runs follow a major catalyst, whether it’s infrastructure improvements or institutional adoption, which attracts new capital and fuels speculation. Over time, leverage builds, excesses emerge, and major events, such as regulatory crackdowns or financial fraud, trigger sharp pullbacks.

This pattern has played out time and again: from the early days of the Mt. Gox collapse in 2014 to the rise and fall of ICOs in 2017-2018, and most recently the deleveraging crisis caused by the collapse of FTX and Three Arrows Capital in 2022. However, each winter has been followed by a stronger recovery, culminating in Bitcoin’s latest bull run, spurred by mainstream adoption of a Bitcoin ETF in 2024.

Executive Order: A Game Changer

The fundamental question Hougan explores is whether the established cycle will be disrupted by Trump’s recent executive order, which prioritizes the development of the U.S. digital asset ecosystem. The order, which outlines a clear regulatory framework and even envisions the creation of a national digital asset reserve, represents the most bullish stance on Bitcoin by a current or former U.S. president.

The implications are far-reaching:

• Regulatory Clarity:By removing legal uncertainty, the executive order paves the way for institutional capital to flow into Bitcoin on an unprecedented scale.

• Wall Street Consolidation:With the SEC and financial regulators now backing cryptocurrencies, major banks can enter the space and offer Bitcoin custody, loans, and structured products to their clients.

• Government Adoption:The concept of a national digital asset reserve suggests that in the future the U.S. Treasury could hold Bitcoin as a reserve asset, cementing its status as digital gold.

These developments won’t happen overnight, but their cumulative effect could fundamentally change Bitcoin’s market dynamics. Unlike previous cycles, which were driven by speculative retail frenzy, this shift is underpinned by institutional adoption and regulatory acceptance — a more stable foundation.

The End of Crypto Winter?

If history repeats itself, Bitcoin will continue to rise until 2025 before facing a sharp correction in 2026. However, Hougan says this time may be different. While he acknowledges the risk of speculative excess and leverage-driven bubbles, he argues that the sheer scale of institutional adoption will prevent the kind of prolonged bear markets seen in the past.

It’s a crucial distinction. In previous cycles, Bitcoin lacked a strong base of value-oriented investors. Now, with ETFs making it easier for pensions, hedge funds and sovereign wealth funds to allocate to Bitcoin, the asset is no longer reliant solely on retail enthusiasm. The result? There may still be a correction, but it’s likely to be smaller and shorter in duration.

What’s Next?

Bitcoin’s price has already broken the $100,000 mark, and forecasts from industry leaders such as BlackRock CEO Larry Fink suggest it could reach $700,000 in the next few years. If Trump’s policies accelerate institutional adoption, the typical four-year pattern could be replaced by a more traditional asset class growth trajectory—similar to how gold responded to the end of the gold standard in the 1970s.

While risks remain—including unforeseen regulatory rollbacks and excessive leverage—the direction of travel is clear: Bitcoin is on its way to becoming a mainstream financial asset. If four-year cycles were driven by Bitcoin’s nascent and speculative nature, its maturity may render such cycles obsolete.

Conclusion

For more than a decade, investors have used four-year cycles as a roadmap for Bitcoin market movements. But Trump’s executive order could be the defining moment that breaks that pattern, replacing it with a more sustained, institutionally driven phase of growth. With increasing acceptance of Bitcoin by Wall Street, corporations, and even governments, the question is no longer whether a crypto winter will arrive in 2026, but whether it will arrive.