Cathie Wood, CEO of Ark Investments, said Bitcoin's four-year long-term pattern may be losing control as large financial institutions buy and hold more of the supply, a change that could dampen price volatility and change how investors plan for the future.
Institutional purchases change the market
Big companies and spot ETFs are gradually locking up the coins that used to flow in and out of the hands of retailers, Wood said. At the latest halving on April 20, 2024, miners' rewards were reduced to 3.125 BTC.
This decline equates to a drop in supply of about 450 Bitcoins each day, a number some analysts call dwarfed by the trillions of dollars attributable to market value and the billions flowing into ETFs.
Ark has also been active, buying shares in Coinbase, Circle, and its own Ark21Shares Bitcoin ETF (ARKB), indicating that institutional demand is more than rumored.
Cycle rules are being questioned
Based on reports from banks and crypto companies, the familiar cycle of a halving rally followed by a 75-90% crash is being discussed.
Standard Chartered lowered its 2025 price forecast from $200,000 to $100,000, arguing that ETF inflows would reduce the price punch of the halving.
Bitwise's Matt Hogan and CryptoQuant founder Ki Yong-joo said institutional trends have changed and even erased the classical rhythm.
The market peaked around $122,000 in July, and some analysts are now saying future drawdowns could be shallower, in the 25% to 40% range, rather than the extreme crashes seen previously.
Market structure still shows old patterns
Not all evidence points to completion of the cycle. Reports published by on-chain analytics companies such as Glassnode show the behavior of long-term holders, such as the ups and downs of the past.
According to the study, demand from late-cycle buyers has softened, mirroring last year. It is argued that halvings are not unrelated events, but remain meaningful breaks in long-term trends.
Macro observers add that broader economic forces such as interest rates, fiat liquidity and institutional investors are becoming increasingly important in price developments.
Analysts say investors should expect long-term price movements more frequently as bull markets last longer than several months and volatility is generally lower.
Mr Wood suggested that volatility was decreasing and the market may have already reached its lows a few weeks ago.
Featured image from Unsplash, chart from TradingView
