Will Trump's Executive Order Disrupt Bitcoin's Four-Year Market Cycle?

(MENAFN- crypto Breaking) The landscape of the bitcoin market has historically been shaped by a predictable four-year cycle, characterized by three years of escalating prices followed by a significant downturn. However, a major transformation in policy from Washington, particularly under the leadership of former President Donald Trump, has the potential to disrupt this cycle and signal the start of an extended era of growth for the Cryptocurrency sector.

Recently, Matt Hougan, Chief investment Officer at Bitwise Asset Management, raised an intriguing inquiry: Can Trump's Executive Order disrupt crypto's four-year cycle? Though his response is nuanced, he tends to conclude with a resounding yes.

Hougan emphasizes that he does not believe the four-year market cycle for Bitcoin is primarily influenced by its halving events. He explains,“Many people attempt to connect it to Bitcoin 's quadrennial 'halving,' but these events do not align with the cycle, having taken place in 2016, 2020, and 2024.”

Historically, Bitcoin 's four-year cycle has been influenced by a combination of investor sentiment, technological advancements, and market conditions. Typically, a bull market emerges following a significant event-whether it's advancements in infrastructure or increased institutional engagement-that attracts fresh investments and stirs speculation. As time progresses, leverage builds up, and market excesses develop, leading to a substantial event-such as regulatory enforcement or financial scandals-that induces a severe correction.

This cycle has been repeatedly observed, from the collapse of Mt. Gox in 2014 to the ICO boom and subsequent downturn of 2017-2018, and more recently, the market turmoil of 2022, highlighted by the fall of FTX and Three Arrows Capital. Nevertheless, each downturn has been followed by an even more vigorous recovery, culminating in Bitcoin 's recent bull market driven by the mainstream acceptance of Bitcoin ETFs in 2024.

Related: Nasdaq Suggests In-Kind Redemptions for BlackRock's Bitcoin ETF

The pivotal question that Hougan delves into is whether Trump's recent Executive Order , which emphasizes the advancement of the digital asset landscape in the U.S., could disrupt the traditional cycle. This order lays out a clear regulatory framework and even contemplates the establishment of a national digital asset reserve, representing a notably positive outlook on Bitcoin from any current or former U.S. president.

The ramifications of this order are significant:

• Clear Regulatory Guidelines: By removing legal ambiguities, the Executive Order facilitates a larger influx of institutional capital into Bitcoin .
• Integration with Wall Street: With regulatory bodies like the SEC now supportive of cryptocurrencies, major financial institutions can enter the market, providing Bitcoin custody, lending, and structured financial products to clients.
• Government Involvement: The proposal of a national Bitcoin reserve suggests a future where the U.S. Treasury could hold Bitcoin as a reserve asset, solidifying its place as a form of digital gold.

While these changes won't happen overnight, their combined impact could significantly reshape Bitcoin 's market behavior. Unlike past cycles primarily driven by retail speculation, this new phase appears to rest on institutional participation and regulatory support, creating a more stable foundation.

Related: Why Numerous Companies Will Invest in Bitcoin by 2025

If historical patterns hold, Bitcoin might continue to climb through 2025, only to confront a significant downturn in 2026. However, Hougan posits that this cycle could be different. He acknowledges the potential for speculative excess and leverage-driven bubbles, yet contends that the magnitude of institutional engagement will likely preclude the extensive bear markets seen previously.

This distinction is vital. In earlier cycles, Bitcoin 's support base lacked value-driven investors. Today, the advent of ETFs allows pension funds, hedge funds, and sovereign wealth entities to allocate resources to Bitcoin , diminishing its reliance solely on retail enthusiasm. The outcome? Corrections may still happen, but they are likely to be more shallow and brief.

Bitcoin has already surpassed the $100,000 threshold, and forecasts from industry influencers, including BlackRock CEO Larry Fink, suggest it could reach $700,000 within the next few years. Should Trump's initiatives foster faster institutional adoption, the conventional four-year cycle might transition into a more stable growth pattern similar to how gold evolved post-gold standard in the 1970s.

Related: BlackRock CEO Larry Fink Predicts $700K Bitcoin Price Amid Inflation Concerns

While uncertainties remain-such as unexpected regulatory changes or excessive leverage-the trajectory is evident: Bitcoin is becoming an established financial asset. If the previous four-year cycle stemmed from Bitcoin 's nascent stage and speculative character, its maturation could render such cycles irrelevant.

For over a decade, the four-year cycle has served as a guide for Bitcoin investors navigating market shifts. However, Trump's Executive Order may indeed be a watershed moment, potentially transforming this pattern into a phase of more sustained, institutionally-driven growth. As Wall Street, businesses, and even government entities increasingly adopt Bitcoin , the real question might shift from whether a crypto winter will occur in 2026 to whether it will happen at all.

Disclaimer: This publication is intended for informational use only and does not represent financial advice. Readers should conduct thorough independent research before making investing decisions.

Crypto assets are highly volatile. Your capital is at risk.
Don't invest unless you're prepared to lose all the money you invest.
This is a high-risk investment, and you should not expect to be protected if something goes wrong.

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