Opinion: Bitcoin's four-year cycle has ended, and a new "two-year cycle" is about to begin.

According to an article by Jeff Park, an advisor at Bitwise, Bitcoin's traditional four-year cycle is driven by a combination of mining economics and behavioral psychology, but in the future, Bitcoin will follow a "two-year cycle" driven by a combination of "fund manager economics" and "ETF footprint-based behavioral psychology".

He argues that in the old cycle, the halving of supply shocks and the resulting reflexive herd behavior were reliable drivers, but the influence of the supply side is now less significant. The analysis of the new cycle is based on three main assumptions:

Investors evaluate Bitcoin investments within a one- to two-year timeframe.

The inflow of funds from professional investors through ETFs will dominate Bitcoin's liquidity, with ETFs serving as a proxy indicator for tracking.

The analysis does not consider the selling activities of OG whales (who are still the largest supply setters in the market).

Jeff Park argues that year-end profit and loss (YTD P&L) is a key factor in the asset management industry because annual performance determines fund fees (especially for hedge funds). When fund managers lack sufficient early-year profits as a buffer, they are more inclined to sell their riskiest positions as the year-end approaches. A research report points out that capital inflows mechanically drive up returns, and high returns attract even more inflows; this cyclical reversal takes nearly two years.

Based on this, he analyzed possible scenarios for fund managers to assess Bitcoin positions:

Scenario 1 (2024): Bitcoin rises by 100%, far exceeding the institutional compound annual growth rate (CAGR) threshold of 30%.

Scenario 2 (2025): Bitcoin has fallen 7% year-to-date. To reach the target, investors would need to achieve a return of more than 50% over the next two years.

Scenario 3 (Two-Year Holding): Investors have achieved an 85% gain, slightly above the 70% return required for a 30% CAGR. At this point, a rational fund manager might consider selling to lock in profits, protect their reputation, and demonstrate the value of their "risk management" as a premium service.

Jeff Park believes Bitcoin is currently approaching an increasingly important price level of $84,000, which represents the total cost basis of the ETF from its inception to the present. He points out that the majority of the ETF's positive profits came in 2024, while ETF inflows in 2025 were almost entirely unprofitable (except for March). The largest monthly inflow occurred in October 2024 (when BTC had already reached $70,000).

He explained that this setup could be bearish because investors who invested at the end of 2024 but didn't reach the return threshold will face a decision point as the two-year period approaches. If the market enters a bear market, the reason will no longer be the four-year cycle, but rather the two-year cycle's failure to allow fund managers to bring in new capital at the right entry points to offset profit-taking by exiting investors.

He concluded that the future will no longer solely focus on monitoring the average cost basis of ETF holders, but rather on the average profit movement trend categorized by purchase time. He believes this will be the biggest source of pressure on future Bitcoin price movements, liquidity supply, and circuit breaker mechanisms, leading to a "dynamic two-year cycle." He emphasized that if Bitcoin prices stagnate, it will be negative for Bitcoin in the institutional era because asset management is a "cost of capital" business; if Bitcoin investment returns are compressed to below 30% due to price stagnation, it will lead to investor selling. He believes that buyers (fund managers) are more predictable than in the past four-year cycles, and the reduced importance of supply constraints means that this more predictable behavior will dominate.