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CNBC
3 days ago
- Business
- CNBC
A major historical bitcoin cycle that dictates its price might be breaking
Bitcoin's historical "cycle" is showing signs that it might be breaking as a changing profile of investors and supportive regulation reshapes market dynamics. If this often predictable pattern is broken, it would have significant implications for the way investors assess the cryptocurrency's price action and the potential timing of when to invest in bitcoin. "It's not officially over until we see positive returns in 2026. But I think we will, so let's say this: I think the 4-year cycle is over," Matthew Hougan, chief investment officer at Bitwise Asset Management, told CNBC. Generally, the bitcoin cycle refers to a four year pattern of price movement that revolves around a key event known as the halving, a change to mining rewards that is written in bitcoin's code. The halving happens roughly every four years, with the last one taking place in April 2024 and the one prior to that was in May 2020. When the halving occurs, the rewards in the form of bitcoin that are given to so-called "miners" — entities that keep the bitcoin network functioning — are cut in half. This reduces the supply of bitcoin into the market. Therefore, there will only ever be 21 million bitcoin in existence. Typically, bitcoin would rally in the months after halving to eventually reach a fresh all-time high. Then bitcoin would crash, dropping roughly 70% to 80% from its peak leading to the onset of a "crypto winter," a prolonged period of depressed digital coin prices. The price of other cryptos would also fall dramatically in this period. Bitcoin would then trade within a range for a while, and as the next halving approaches, it generally sees its price appreciate. Then the cycle repeats. There was unprecedented market reaction around the last halving as Bitcoin hit a fresh all-time high of above $73,000 in March 2024, about a month before the halving, rather than reaching new heights after the celebrated event as expected. "In every previous cycle, new all-time highs came 12-18 months after the halving," Saksham Diwan, research analyst at CoinDesk Data, told CNBC. The main factor was the U.S. approval of bitcoin exchange-traded funds (ETFs) which began trading in January 2024. ETFs track the price movement of bitcoin without an investor actually having to own the cryptocurrency itself. Big inflows into ETFs, and the hope that this could bring more traditional institutional investors who had previously stayed away from crypto, helped boost the price of bitcoin. "This time, spot Bitcoin ETF demand essentially front-ran the typical post-halving price discovery. This was indeed the first clear indication that institutional flows could alter traditional cycle dynamics," Diwan said. The ETF was the first major factor that disrupted bitcoin's four-year rhythm. It brought in investors with deep pockets who were interested in holding the cryptocurrency longer term. But a number of other market factors have changed. Bitwise Asset Management's Hougan points to "blowups in crypto" that often preceded the crypto winters. He referenced the crash of so-called initial coin offerings (ICOs) in 2018 and the collapse of crypto exchange FTX in 2022. Meanwhile, the macroeconomic environment and regulation is becoming more supportive. "Interest rates are more likely to go down than up in the next year, and the fact that regulators and legislators are now willing to engage with crypto rather than steadfastly refusing to deal with it will dramatically reduce the risk of future blow-ups," Hougan said. Gary Gensler, the former leader of the U.S. Securities and Exchange Commission, had cracked down on the sector and opened a number of cases against crypto firms. Those in the industry said they were being unfairly targeted. Under the current administration of U.S. President Donald Trump, the SEC has dropped some cases against crypto firms. Washington has looked to introduce new laws around crypto and has even launched a bitcoin strategic reserve. Meanwhile, public companies are accumulating cryptocurrencies, especially bitcoin, as part of a new strategy. "With increasing market maturity, long-term holder accumulation at all-time highs, and dampened volatility, the traditional 4-year rhythm is being replaced by more liquidity-sensitive, macro-correlated behavior," Ryan Chow, co-founder of Solv Protocol, told CNBC. One key point to note is that historically the most significant price appreciation for bitcoin occurred between days 500 and 720 post-halving, according to Diwan of CoinDesk Data. Bitcoin peaked during this window in the 2016 and 2020 cycles, Diwan noted. "If this pattern was to repeat, then we should watch for potential acceleration between Q3 2025 and early Q1 2026," Diwan said, adding that "price action [in] this cycle has been notably subdued compared to previous post-halving periods." Bitwise Asset Management's Hougan said the four-year cycle is over, but for it to officially be dead, bitcoin would need to have a good 2026, which he expects will happen. "I don't think we've repealed volatility, but I think a) the forces that have historically created the four-year cycle are weaker than they were in the past and b) there are other very strong forces moving on a different timeline that I think will overwhelm our four-year tendency," Hougan said in an emailed comment. Bitcoin's latest record high was hit on July 14 as it pushed above $123,000. One prominent feature of previous cycles is that bitcoin would plunge roughly 70% to 80% from its record high following the halving. Crypto industry insiders told CNBC this won't happen anymore, given the reasons they've outlined to support a changing four-year cycle. "We believe the era of brutal 70–80% drawdowns is behind us," Solv Protocol's Chow said. He noted the largest correction this cycle has seen was around 26% on a closing basis compared to around 84% post-2017 and 77% post-2021 all-time highs. Long-term holders of bitcoin as well as "steady institutional inflows are contributing to greater downside absorption, Chow said. He added that there may be corrections in the range of 30% to 50% "in reaction to macro shocks or regulatory surprises, but they're likely to be shorter and less violent than in previous cycles." Hougan also said that 30% to 50% falls are possible but: "I bet 70% pullbacks are a thing of the past."
Yahoo
23-07-2025
- Business
- Yahoo
Bitwise CIO on Ether's ‘Demand Shock': Why ETH's Rally Has Staying Power
Ether's recent price action may be fueled by more than just sentiment. According to Bitwise Asset Management Chief Investment Officer Matthew Hougan, the world's second-largest crypto asset is undergoing what he calls a 'demand shock,' driven by surging inflows into exchange-traded products and new corporate treasury strategies. In a thread posted Tuesday on X, Hougan broke down why he believes ether's rally is only getting started. Since mid-May, he estimates that spot ETH exchange-traded products (ETPs) and corporate treasuries have acquired a combined 2.83 million ETH — roughly $10 billion at current prices. That's 32 times greater than the amount of net new ETH issued during the same period. 'Sometimes, it really is that easy,' Hougan wrote, referencing the role of supply and demand in determining short-term prices. He noted that while bitcoin has benefited from this dynamic for more than a year, ETH only began experiencing the same effect recently. According to Hougan, spot ether ETPs launched in July 2024, but saw limited traction through the first half of 2025. By May 15, total inflows stood at just $2.5 billion, with ETPs acquiring about 660,000 ETH — closely matching the 543,000 ETH newly minted by the network. During this period, he says, ETH lacked the same support that drove bitcoin higher: 'There were no major Ethereum Treasury Companies to speak of.' That changed in the past two months. Hougan pointed to the emergence of publicly traded treasury holders like BitMine Immersion Technologies (BMNR) and SharpLink Gaming (SBET), which have accumulated hundreds of thousands of ETH while staking for yield. With ETP momentum also accelerating, the combined pressure has created a structural supply imbalance. Looking ahead, Hougan predicts demand could rise even further. If treasury firms and ETPs purchase $20 billion in ETH over the next 12 months — as he believes they could — that would equate to roughly 5.33 million ETH at today's prices. By comparison, Etherfeum is projected to issue just 800,000 new ETH over the same timeframe. 'ETH is of course different from BTC,' he acknowledged. 'Its price is not set purely by supply and demand, and it doesn't share BTC's capped long-term issuance. But right now, that doesn't matter.' At the time of writing, ETH is trading at $3,658, down 0.69% in the past 24 hours, according to CoinDesk Data. Over the past seven, 14, and 30 days, it is up 15.8%, 40.1%, and 62.5%, respectively. Technical Analysis Highlights According to CoinDesk Research's technical analysis data model, ETH traded in a $134.34 range from July 22 at 10:00 UTC to July 23 at 09:00 UTC, swinging between $3,763.70 and $3,629.35. Institutional resistance emerged near the $3,750–$3,760 zone during July 22's evening session, with volume peaking at 445,297 contracts. Ether slid 1% during final trading hours, closing at $3,661.35, as corporate sellers stepped in above $3,740. The $3,700 mark has become a key pivot, acting as both support and resistance as corporate positioning flattens. Volume spikes above $3,740 suggest large-scale distribution and potential near-term consolidation. Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk's full AI Policy. Sign in to access your portfolio
Yahoo
27-02-2025
- Business
- Yahoo
Crypto Daybook Americas: Risk-Off Remains the Theme as Market Settles
By Omkar Godbole (All times ET unless indicated otherwise) The crypto market is looking to regain some poise after yesterday's tumble with on-chain indicators showing signs of capitulation in bitcoin. Some tokens, like MakerDAO's MKR, stand out with a 20% gain in 24 hours, thanks to the DAO's buyback and burn process. IP, the native token of decentralized intellectual property-focused blockchain Story Protocol, is also in the green, having risen nearly 40%. The token's price has doubled in two weeks after being listed on South Korean exchanges. Other notable outperformers include Celestia's TIA along with XDC, QNT and HYPE. Data tracked by blockchain sleuth Lookonchain shows whales have been buying the dip in the HYPE token. XRP, meanwhile, is hanging on to a key Fibonacci level, keeping bulls' hope for bigger gains alive. According to Matthew Hougan, chief investment officer of Bitwise Asset Management, the crypto market is digesting the end of the recent memecoin frenzy, which could be replaced by productive sectors such as stablecoins, real-world assets and DeFi. "But until they start making their presence felt, the loss of energy will create a drag on the market," Hougan said on X. On the macroeconomic front, the optimism seen after the Nov. 4 election is being replaced by caution, as evidenced by Tuesday's release of the U.S. consumer confidence. The gauge dropped to an eight-month low, and the one-year inflation expectations were highest for 1.5 years, with President Donald Trump's tariffs singled out as the primary concern in almost every household and business survey. The dour sentiment and a strengthening yen might keep the upside in risk assets restricted for some time. Earlier this week, Belgium's central bank's head, Pierre Wunsch, warned that the ECB risks sleep-walking into too many rate cuts. The Fed, for its part, is unlikely to do QE anytime soon. (Sure, the January meeting minutes discussed an end of quantitive tightening, but that does not mean quantitative easing.) Speaking of key events to watch out for, the Senate Banking Committee, led by Senator Cynthia Lummis, is set to revisit crypto regulations during Wednesday's scheduled hearing titled 'Exploring Bipartisan Legislative Frameworks for Digital Assets." Stay alert! Crypto: Feb. 26, 8:30 a.m.: Cosmos (ATOM) network upgrade (to version v22.2.0). Feb. 26: RedStone (RED) farming starts on Binance Launchpool. Feb. 27, 4:00 a.m.: Alchemy Pay (ACH) community AMA on Discord. Feb. 27: Solana-based L2 Sonic SVM (SONIC) mainnet launch ('Mobius'). March 1: Spot trading on the Arkham Exchange goes live in 17 U.S. states. March 5 (provisional): At epoch 222464, testing of Ethereum's Pectra upgrade on the Sepolia testnet starts. Macro Feb. 26, 10:00 a.m.: The U.S. Census Bureau releases January's New Residential Sales report. New Home Sales Est. 0.68M vs. Prev. 0.698M New Home Sales MoM Prev. 3.6% Feb. 26-27: 2025's first G20 finance ministers and central bank governors meeting (Cape Town). Feb. 27, 8:30 a.m.: The U.S. Bureau of Economic Analysis releases Q4 GDP (2nd estimate). Core PCE Prices QoQ Est. 2.5% vs. Prev. 2.2% PCE Prices QoQ Est. 2.3% vs. Prev. 1.5% GDP Growth Rate QoQ Est. 2.3% vs. Prev. 3.1% Feb. 27, 8:30 a.m.: The U.S. Department of Labor releases Unemployment Insurance Weekly claims for the week ended Feb. 22. Initial Jobless Claims Est. 221K vs. Prev. 219K Earnings Feb. 26: MARA Holdings (MARA), post-market, $-0.13 Feb. 26: NVIDIA (NVDA), post-market, $0.85 Governances votes & calls Frax DAO is discussing upgrading the protocol by renaming FXS to FRAX, making it the gas token on Fraxtal, implementing the Frax North Star hard fork, and introducing a tail emission plan with gradually decreasing emissions and other enhancements. DYdX DAO is voting on distributing $1.5 million in DYDX tokens from the community treasury to qualifying users in trading season 9 as part of its incentives program. Unlocks Feb. 28: Optimism (OP) to unlock 2.32% of circulating supply worth $33.97 million. Mar. 1: DYdX to unlock 1.14% of circulating supply worth $5.76 million. Mar. 1: ZetaChain (ZETA) to unlock 6.48% of circulating supply worth $12.81 million. Mar. 1: Sui (SUI) to unlock 0.74% of circulating supply worth $68.90 million. Mar. 2: Ethena (ENA) to unlock 1.3% of circulating supply worth $16.47 million. Mar. 7: Kaspa (KAS) to unlock 0.63% of circulating supply worth $14.85 million. Mar. 8: Berachain (BERA) to unlock 9.28% of circulating supply worth $70.90 million. Token Listings Feb. 26: Moonwell (WELL) to be listed on Kraken. Feb. 27: Venice token (VVV) to be listed on Kraken. Feb. 28: Worldcoin (WLD) to be listed on Kraken. CoinDesk's Consensus to take place in Toronto on May 14-16. Use code DAYBOOK and save 15% on passes. Day 4 of 8: ETHDenver 2025 (Denver) March 2-3: Crypto Expo Europe (Bucharest, Romania) March 8: Bitcoin Alive (Sydney, Australia) March 10-11: MoneyLIVE Summit (London) March 13-14: Web3 Amsterdam '25 (Netherlands) March 19-20: Next Block Expo (Warsaw, Poland) March 26: DC Blockchain Summit 2025 (Washington) March 28: Solana APEX (Cape Town, South Africa) By Francisco Rodrigues Solana, often criticized over its inflationary monetary policy, is currently considering implementing a governance proposal to change it, SIMD-0228. The proposal would introduce a dynamic, market-driven emissions model for SOL tokens and potentially reduce inflation. The proposal would move the blockchain away from its current fixed emissions model that has seen SOL's circulating supply increase to around 500 million tokens. Elsewhere Story Protocol's token, IP, has been bucking the bearish trend that gripped the cryptocurrency market over the last few days. IP outperformed the broader CoinDesk 20 Index as traders bet on the tokenization of intellectual property. The industry ecosystem is also rallying behind cryptocurrency exchange Bybit after its $1.5 billion hack. The exchange has launched a 'war against Lazarus' to crowdsource investigative efforts against the North Korean-linked group. BTC's one-month CME futures basis has dropped to 4%, the lowest in nearly two years, according to Velo Data. That's a sign of weakening bullish sentiment. Ether's basis has dropped to just over 5%. Perpetual funding rates for TRX, AVAX, XLM, SHIB and OM are negative, reflecting a bias for bearish short positions. BTC, ETH short-term puts continue to trade at a premium to calls, reflecting fears of a continued price drop. BTC is up 1% from 4 p.m. ET Tuesday at $89,19377 (24hrs: -0.11%) ETH is down 0.36% at $2,487.88 (24hrs: +2.19%) CoinDesk 20 is up 0.42% at 2,882.89 (24hrs: +2.34%) Ether CESR Composite Staking Rate is up 29 bps at 3.28% BTC funding rate is at 0.0005% (0.6% annualized) on OKX DXY is up 0.17% 106.49 Gold is down 0.24% at $2,913.89/oz Silver is down 0.78% at $31.78/oz Nikkei 225 closed -0.25% at 38,142.37 Hang Seng closed +3.27% at 23,787.93 FTSE is up 0.54% at 8,715.19 Euro Stoxx 50 is up 1.14% at 5,510.13 DJIA closed on Tuesday +0.37% at 43,621.16 S&P 500 closed -0.47% at 5,955.25 Nasdaq closed -1.35% at 19,026.39 S&P/TSX Composite Index closed +0.21% at 25,203.98 S&P 40 Latin America closed +0.19% at 2,390.95 U.S. 10-year Treasury rate is up 2 bps at 4.32% E-mini S&P 500 futures are up 0.5% at 5,999.75 E-mini Nasdaq-100 futures are up 0.82% at 21,321.50 E-mini Dow Jones Industrial Average Index futures are up 0.27% at 43,808.00 BTC Dominance: 61.11 (0.13%) Ethereum to bitcoin ratio: 0.02793 (-0.75%) Hashrate (seven-day moving average): 746 EH/s Hashprice (spot): $52.40 Total Fees: 11.39 BTC / $1.1 million CME Futures Open Interest: 164,970 BTC BTC priced in gold: 30.5 oz BTC vs gold market cap: 8.66% Bitcoin's hourly chart shows the MACD histogram has been biased bullish since late Tuesday. Still, there has been little progress to the upside in terms of price. The divergence between prices and MACD, coupled with the downward sloping key averages, suggests potential for another round of selling before a meaningful bottom is reached. A convincing move above $90,000 is needed to invalidate the bearish outlook. MicroStrategy (MSTR): closed on Tuesday at $250.51 (-11.41%), up 3.66% at $259.68 in pre-market Coinbase Global (COIN): closed at $212.49 (-6.42%), up 2.04% at $216.82 Galaxy Digital Holdings (GLXY): closed at C$20.09 (-7.84%) MARA Holdings (MARA): closed at $12.41 (-10.62%), up 2.86% at $12.77 Riot Platforms (RIOT): closed at $9.32 (-6.71%), up 2.79% at $9.58 Core Scientific (CORZ): closed at $9.76 (-1.01%), up 3.28% at $10.08 CleanSpark (CLSK): closed at $8.15 (-8.43%), up 1.96% at $8.31 CoinShares Valkyrie Bitcoin Miners ETF (WGMI): closed at $17.04 (-11.25%), up 4.46% at $17.80 Semler Scientific (SMLR): closed at $42.42 (-4.42%), up 2.5% at $43.48 Exodus Movement (EXOD): closed at $39.86 (-3.16%), down 1% at $39.46 Spot BTC ETFs: Daily net flow: -$937.7 million Cumulative net flows: $38.09 billion Total BTC holdings ~ 1,157 million. Spot ETH ETFs Daily net flow: -$50.1 million Cumulative net flows: $3.02 billion Total ETH holdings ~ 3.750 million. Source: Farside Investors The net selling volume in BTC on Tuesday was the strongest since May 2021, according to data tracked by Glassnode and Andre Dragosch, head of research for Europe at Bitwise. Perhaps weak hands have capitulated, leaving the market in a much healthier state. XRP, BNB Edge Higher as Bitcoin Bulls Eye $90K After Tuesday Bloodbath (CoinDesk): Bitcoin rebounded to nearly $89,000 with major cryptocurrencies XRP and BNB also showing signs of a cautious recovery. Bitcoin's Tuesday Bloodbath Was the Bottom, Analyst Says (CoinDesk): On-chain signals suggest limited further downside. U.S. Bitcoin ETFs See Record Daily Outflow of Over $930M as Carry Trades Lose Shine to the 10-Year Treasury Note (CoinDesk); Tuesday marked the steepest single-day redemption for U.S.-listed spot bitcoin ETFs since their inception. Circle Says Stablecoin Issuers Should Be U.S. Registered (Bloomberg): Jeremy Allaire, co-founder of stablecoin issuer Circle, said issuers of dollar-pegged crypto tokens should be registered in the U.S. Treasury Yields Rebound Slightly, Dollar Undermined by US Growth Worries (Reuters): The 10-year Treasury yield climbed 3 basis points to 4.3271% after the U.S. House passed a budget bill that paves the way for $4.5 trillion in tax cuts. Top Finance Ministers Snub G20 as Global Co-Operation Comes Under Strain (Financial Times): This week's G20 meeting in South Africa is notable for the absence of finance ministers from the U.S., China, Japan, India, Brazil and Mexico, prompting doubts about the forum's effectiveness. Sign in to access your portfolio
