The Bitcoin 4-Year Cycle Has Fundamentally Changed
$BTC The traditional Bitcoin post-halving cycle no longer behaves as it once did. Historical cycles delivered ~300% returns, yet post-2024 halving, Bitcoin returned only +31%. This is not merely a delay—it signals a regime shift.
Cause: ETF arbitrage.
A significant portion of ETF inflows (20–56%) were not adoption-driven. Instead, they were basis trades chasing ~25% annualized yields: hedge funds buying spot ETFs while shorting CME futures, creating delta-neutral positions with no conviction in Bitcoin itself.
Evidence:
CFTC data shows leveraged funds are 5:1 short versus long, indicating these are carry trades, not institutional bets.
ETF inflows correlate strongly (0.878) with basis compression, not market sentiment.
Yield on these trades has collapsed from 25% to 0.37%, signaling that the carry trade is ending.
Implications:
The supposed “institutional floor” was largely arbitrage capital—now exiting.
BTC’s correlation with Nasdaq has risen to 0.75, reflecting that Bitcoin now reacts more to Fed policy than halving supply dynamics.
Traders relying on the 2017 cycle framework in 2026 are likely misreading the market.
Looking Ahead:
The next Bitcoin bull run will not originate from supply shocks alone. Key conditions may include:
Basis exceeding 7%
Put/call ratio dropping below 0.6
Exhaustion of mechanical sellers
Falsifiable Prediction:
If BTC exceeds $150k by Q2 2026 without Fed easing, this thesis is invalid, and the classic cycle remains intact.
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