Historically, Bitcoin (BTC 0.94%) has followed a four-year cycle of boom and bust. The bust years have come like clockwork: 2014, 2018, and 2022 were all years of significant decline. If history repeats itself yet again, Bitcoin could be in store for another bust year in 2026.
That's why I'm increasingly convinced that just a single question will determine the fate of Bitcoin next year: "Is the Bitcoin four-year cycle over?"
Yes, the four-year cycle is over
Several top investment firms are now saying the Bitcoin four-year cycle no longer exists. They say it has been banished to the dustbin of history. For example, Fidelity thinks we're moving into an economic supercycle, in which the price of Bitcoin will continue to move up at a brisk pace for perhaps the next decade.
From this perspective, Bitcoin's recent 30% decline in price is nothing to worry about. It's simply a brief drawdown before the inexorable rise of Bitcoin continues.
Image source: Getty Images.
And Fidelity is hardly alone. Investment firm Bernstein has also suggested that the four-year cycle is finally over. There's simply too much money from institutional investors pouring into Bitcoin these days, according to Bernstein, and this is more than enough to offset any panic selling by retail investors.
Given the Trump administration's aggressive pro-crypto policies, it's conceivable that the Bitcoin supercycle could continue until 2028, if not later. During this time period, the pace of institutional adoption of Bitcoin will only increase.
At the same time, the appearance of new financial derivatives will eliminate some of the risk and volatility of investing in Bitcoin. This should help attract new risk-averse institutional investors to the crypto asset class.
No, the four-year cycle will continue
Of course, this thinking flies in the face of what has been a commonly held belief about Bitcoin for nearly a decade. The four-year cycle is part of the lore of investing in Bitcoin. Even top Wall Street investment banks have bought into the concept of the four-year cycle.
You can check the date yourself: Bitcoin typically has two to three blockbuster years, followed by one stinker of a year in which it collapses in value by 57% or more.
Then the cycle repeats, with Bitcoin steadily gaining in value, before a final blow-off top at the end of the cycle. The fact that colossal sell-offs have occurred with stunning regularity every four years would appear to be more than just a statistical coincidence.
CRYPTO: BTC
Key Data Points
The four-year cycle might sound like a bunch of crypto mumbo-jumbo, except for one fact: Bitcoin experiences a halving event every four years. After the halving, the rate of new Bitcoin creation drops by half. This halving introduces additional scarcity for Bitcoin, thereby helping to drive up its price for an extended period.
The period of rapid price appreciation for Bitcoin after the halving usually lasts anywhere from 12 to 18 months. Given that the most recent halving took place in April 2024, that suggests that the period of Bitcoin price appreciation should have ended sometime in October.
Maybe it's just a coincidence, but Bitcoin hit a new all-time high of $126,000 in early October. Since then, it's all been downhill, with Bitcoin sliding by 30% to its current price of $88,000. Was that $126,000 price level the final blow-off top for Bitcoin?
What happens to Bitcoin in 2026?
As famed investor Sir John Templeton once remarked, the four most dangerous words for investors are: "This time it's different." And that's why I'm so concerned about all the investors, analysts, and strategists proclaiming, "This time, it's different with Bitcoin."
From my perspective, as long as the halving happens every four years, the four-year cycle is on. So be wary about buying Bitcoin next year. If history is any guide, it may have further to drop before it finally recovers.
