Bitcoin's 4-Year Cycle: Dead or Just Evolving?

Bitcoin’s four-year cycle is no longer a clean, tradable clock; price is now riding on a stacked set of forces: global liquidity, PMI and macro, institutional/ETF flows, and an increasingly distorted internal crypto market structure. The halving still matters, but as one variable inside a larger liquidity‑driven regime where both violent upside and deep drawdowns are still possible. On-chain indicators like Pi Cycle Top (no crossover), MVRV Z-Score (~2.4 mid-cycle vs >7 peaks), NUPL/Puell (elevated not extreme), and 200WMA show accumulation, not euphoria, while Fundstrat's Tom Lee notes sentiment worse than FTX from halving-meme anchoring. ETFs ($64B inflows, $5-9B daily vol) shift focus to PMI>55, Fed paths over calendars.​​

Classic 4-Year Cycle: What Actually Happened

The standard halving story is simple: every four years the block reward is cut in half, new supply drops, price rallies for ~500–550 days, then a brutal 70–80% bear market follows. That pattern did broadly hold across the three “classic” cycles: post‑2012, post‑2016, and post‑2020, with tops roughly in Q4 of the post‑halving year and long bear markets afterward. Many on‑chain indicators—Pi Cycle Top, MVRV Z-Score, NUPL, Puell Multiple, 200WMA heatmaps—were calibrated around this template and did a decent job of flagging late‑stage euphoria.​

But three cycles is a weak statistical sample. As the macro‑liquidity argument stresses, a pattern observed three times can be coincidence, especially if other variables (QE, PMI, credit growth) moved in lockstep with halving dates. That small-N problem—where N=3 cycles isn't enough data to prove causation—is why analysts arguing 'halvings never truly drove the cycles' have a strong case.

Liquidity & PMI: The “Real” Cycle

Both the liquidity‑focused passage and Tom Lee’s comments push the same thesis: business and liquidity cycles, not halvings, were the primary engine behind prior bull runs.​​

• 2012–13: Fed QE of roughly a trillion dollars plus rising global liquidity matched BTC’s rally from around $10 to above $1,000 and its later collapse as QE slowed and ended.​

• 2016–17: Massive ECB, BoJ and China easing added roughly $2T across balance sheets, aligning with BTC’s move from about $1k to $20k and the subsequent bust as liquidity growth stalled.​

• 2020–21: Pandemic QE saw the Fed expand its balance sheet by more than $5T, with other major central banks injecting huge sums as well; BTC went from about $4k to nearly $69k over that window.​

The PMI overlay makes the relationship more concrete: when PMI is below 50, the economy is contracting and liquidity is scarce; once PMI bottoms and turns back above 50, risk assets, including BTC, tend to bottom; when PMI pushes through ~55 and toward 60, liquidity and activity surge and Bitcoin plus altcoins historically enter their most explosive phase. In both the 2016–17 and 2020–21 cycles, PMIs bottomed and broke 55 in the months that preceded the steepest BTC and “Total 3” (alts ex‑BTC/ETH) advances.​

The key claim from the macro‑liquidity narrative is blunt: in the past, Bitcoin has not entered a true bear market while liquidity and PMI were expanding. Liquidity expansions have coincided with the bull legs; halving dates have simply happened to line up.​

Why This Cycle Feels “Wrong” and Decoupled

S&P 500 and Nasdaq are near all‑time highs, gold and silver have made new highs, but BTC and crypto are in a clear downtrend. Some analysts points out the same PMI chart everyone is using to argue “a turn is coming,” then emphasize that so far PMI prints (e.g., ~48.2) still show contraction: new orders and employment are below 50, Chicago PMI is deeply weak (with one survey showing no firms increasing employment), and private payrolls and Challenger layoff data point to a deteriorating labor market.​

The result is a K‑shaped backdrop:

• Top, index‑heavy growth and mega‑cap tech names rip higher, pushing S&P/Nasdaq to the highs.

• Breadth, small caps (Russell 2000), and real‑economy metrics look much worse, when PMI remains sub‑50 (although on a positive note the Russell 2000 is starting to push higher, possibly indicating a higher PMI soon. We have to remember that markets are forward looking, especially the riskiest assets are the ones reacting first).

• Speculation has focused perversely on unprofitable small caps (up much more than profitable ones), showing how narrow and frothy parts of the equity market are.​

That environment is poison for alts and increasingly for BTC: macro isn’t yet truly in “expansion,” liquidity is still constrained or fragile (QT only recently slowed, several liquidity stress metrics and repo/secured‑funding spreads still flash shortage risk), and the Fed is boxed by weak labor data vs inflation risk. Rate cuts will come—but pre‑GFC history shows cuts can coincide with drawdowns if they arrive into a deteriorating cycle rather than an expanding one.​

This is why some analysts expect:

• More short‑term downside or chop for BTC and alts.

• A delayed business‑cycle expansion once cuts accumulate (two–three more cuts, putting the real inflection around mid‑next year by his probabilities).

• A large catch‑up move in BTC and broader crypto once PMI genuinely trends above 50–55, not just when QT stops on paper.​

That dovetails almost perfectly with the “liquidity clock vs halving clock” argument: halving said “bull,” PMI and liquidity said “not yet.”​

Tom Lee, DATs, and Structural Crypto Stress

Tom Lee’s views add market‑structure nuance on top of the macro:​​

• Sentiment feels worse than during FTX because people anchored on the four‑year script and are now watching it fail in real time, triggering reflexive, fear‑based trading. Price is also understating the real damage from leverage wipeouts across both crypto and equities.​

• Fed uncertainty and perceived politicization make policy feel like a “coin toss,” which amplifies volatility in all risk assets, but crypto’s 24/7 trading and high leverage make it react asymmetrically—bad news gets front‑run and then compounded.​​

• DATs (digital asset treasuries) and pseudo‑MicroStrategy clones introduced a new layer of reflexive leverage: many raised poorly, charged too much, or had no real business model, and are now trading at steep NAV discounts, undergoing a standard capitalist shakeout (most IPOs fail; the survivors are few and strong).​​

Crucially, Lee sees this not as “crypto broken” but as early‑stage capital market noise around vehicles, while stablecoin and RWA rails, especially on Ethereum, quietly build the long‑term structural bull case. The dissonance—strong fundamentals, rough price—is exactly what you’d expect in a regime dominated by macro and leverage resets rather than retail cycle charts.​​

Institutions, ETFs, and Why the Old Cycle Breaks

Both the macro‑cycle passage and Lee’s comments stress that this is the first fully institutional, ETF‑driven cycle:​

• Spot ETFs and related vehicles now manage and intermediate flows at a scale that dwarfs prior retail‑only cycles, with multi‑billion daily volumes and strong basis/futures interlinkages on CME and elsewhere.​

• These allocators run models keyed to liquidity, real rates, PMIs, credit spreads and cross‑asset risk‑on/off signals, not halving dates or rainbow charts. The caricature (“do you think Larry Fink has a four‑year cycle chart on his wall?”) is broadly correct: they care about whether global money supply is expanding and whether PMI is turning, not how many days since the last halving.​
  

That institutionalization cuts both ways:

• It supports the bullish liquidity‑cycle thesis: if the world moves into easing, PMI expansion, and renewed QE or quasi‑QE, institutional risk‑on flows can drive a new leg higher even after the old 4‑year window says “top.”

• But it also amplifies macro vulnerability: if employment, PMIs and breadth stay weak and something “breaks” (e.g., funding markets, credit), the same institutional engines can force de‑risking that keeps BTC under pressure despite halving narratives and micro on‑chain valuations.​
  

So Is the 4-Year Crypto Cycle Dead?

Putting everything together, the intellectually honest stance is:​

• The clean, calendar‑driven 4‑year halving template is effectively dead as a reliable trading rule. The last three cycles are better explained as liquidity/PMI/business‑cycle waves that just happened to align with halvings, not as halving‑caused cycles.​

• A looser, macro‑anchored cycle absolutely still exists. BTC remains highly sensitive to global liquidity, central bank balance sheets, and PMI/business‑cycle turns, and those dynamics will almost certainly continue to produce multi‑year bull and bear regimes. In that sense, “the cycle” lives on—but as a liquidity and institutional positioning cycle, not a halving clock.​

Practically, that means:

• Halving and on‑chain cycle indicators (Pi Cycle, MVRV Z‑Score, NUPL, Puell, LTH supply, realized price, exchange balances, 200WMA) are still useful, but as context for where BTC sits relative to value and realized cost, not as a stand‑alone timing tool.​

• The “must‑watch” panel is now: global liquidity (central bank balance sheets, broad money), PMI and similar business‑cycle gauges, Fed/FOMC path and term structure, ETF/derivatives flow, and internal crypto leverage/positioning (funding, OI, stablecoin supply). Those are the levers both narratives lean on, and they are what institutional flows actually key off.​

For positioning, the two macro passages plus Lee converge on the same trade idea:

• Expect more chop/pain while PMI is sub‑50 and the business cycle hasn’t truly turned, despite QT slowing and rate cuts starting (positive movement in the Russell 2000 might be an indication that risk assets are foreshadowing liquidity flows coming soon).

• Watch for a sustained PMI break above 50–55, clearer liquidity expansion, and possibly a Fed “event” or funding‑market stress that forces renewed easing.

• That is the point at which a new, liquidity‑driven “super‑cycle” leg in BTC and alts becomes statistically plausible—even if it arrives well after the traditional 4‑year window and catches those who sold on halving lore offsides.​​
  

At Myntra Capital, we track these shifts for your edge. Visit myntracapital.com for deep dives on BTC treasuries, miners, and other macro themes.​

Disclaimer: Not financial advice. DYOR. Reach Simon at simon.l@myntracapital.com