The cryptocurrency market is undergoing a fundamental transformation, shifting away from the traditional four-year cycle once dictated by Bitcoin halving events. According to Sandeep Nailwal, co-founder of Polygon, institutional involvement, regulatory developments, and macroeconomic factors have permanently altered the rhythm of market movements.
Nailwal suggests that while Bitcoin halvings still impact supply dynamics, their effect on price cycles has diminished. “We’re no longer seeing the extreme boom-and-bust patterns that defined earlier cycles,” he said. Historically, market downturns of 80–90% were common, but in this evolving environment, corrections are now in the range of 30–40%. He attributes this shift to increasing institutional investment, which has provided greater market stability.
The Rise of Institutional Capital and Bitcoin ETFs
One of the most significant changes driving this transformation is the rise of institutional capital, particularly through financial products like Bitcoin ETFs. These instruments allow investors to gain exposure to Bitcoin without directly holding the asset, changing the way capital moves within the market. Instead of speculative altcoin rallies, capital is increasingly concentrated in blue-chip assets like Bitcoin and Ethereum. 
“The liquidity flow has changed,” Nailwal explained. “With ETFs, institutional money is primarily going into Bitcoin and Ethereum, rather than trickling down to smaller altcoins as we saw in previous cycles.”
Bitcoin dominance—a key metric measuring Bitcoin’s share of the total crypto market capitalization—has surged to nearly 54%, the highest level since 2021. Analysts suggest this trend could continue as regulatory clarity attracts more large-scale investors.
Macroeconomic and Geopolitical Factors at Play
Beyond institutional adoption, broader economic forces are also influencing the new crypto cycle. Higher interest rates and tightened liquidity conditions have slowed speculative activity, but Nailwal believes that when macroeconomic conditions shift, a market resurgence could follow.
Additionally, government policies are playing a growing role. The U.S. administration’s push for a Bitcoin strategic reserve has signaled a new era of legitimacy for the digital asset space. Nailwal notes that such initiatives have reinforced Bitcoin’s status as a long-term store of value, further driving institutional adoption.
A New Era for Crypto Market Behavior
While some analysts, including Miles Deutscher, argue that elements of the traditional four-year cycle still persist, they acknowledge that market behavior has become more unpredictable. The classic sequence of accumulation, rally, distribution, and correction now unfolds at different paces for various assets, with Bitcoin and Ethereum often leading the way before altcoins follow.
“The market isn’t moving as uniformly as before,” Deutscher noted. “What we’re seeing is a more fragmented cycle, where institutional and retail money enter at different times, creating new patterns of volatility and price discovery.”
As the crypto market matures, investors are adjusting to these evolving dynamics. The days of predictable market cycles may be over, but with institutional money providing a stabilizing effect, the industry appears to be entering a new phase—one characterized by sustained growth and less extreme fluctuations.
