Since its debut, the price of Bitcoin has followed a predictable pattern. A quadrennial event slashes the supply of BTC by 50% and spurs scarcity. This halving event has often preceded periods of dramatic price rallies and later pullbacks. The repeating pattern, known in the cryptoverse as the four-year cycle, has largely influenced investor expectations since the apex crypto’s infancy.
Renowned tech investor Cathie Wood, CEO of Ark Invest, takes a different view of Bitcoin’s price trajectory. She suggests that Bitcoin’s price action has, in recent years, been moving beyond this traditional model. Bitcoin’s price movements appear increasingly influenced by factors such as the increased presence of institutional investors compared to previous halving events.
Why This Time May Be Different
Speaking with Fox Business on Tuesday, Wood pointed out that Bitcoin is on track to disrupt the historic four-year halving cycle. She noted that while Bitcoin saw a 75-90% drop in its early days, the asset’s volatility is “going down” in recent times.
“We think that the move by institutions into this new asset class is going to prevent much more of a decline,” she explained, suggesting that “We may have seen the low a couple of weeks ago.”
During previous cycles, the reduced supply led to strong buying from retail investors. Today, capital flows are predominantly driven by exchange-traded funds (ETFs) and corporate balance sheets.
The exec also surmised that Bitcoin is now acting more like a risk-on asset moving in tandem with equities. A risk-off asset, on the other hand, is one that investors tend to pile into during market uncertainty, such as gold.
Wood believes that Bitcoin has “played the risk-off role at different times in its history,” such as during the European sovereign debt crisis or the 2023 US regional banking upheaval. Now, she’s of the opinion that Bitcoin has switched back to risk-on.
“Now, gold is more of a risk-off asset,” she said. “We think this is proof that we are climbing a wall of worry. Investors are using gold as a hedge against geopolitical risk.”
Wood, who previously forecast a top BTC price of $1.5 million by 2030, in November slashed her bull-case projection by $300,000, cautioning that stablecoins are eroding Bitcoin’s role as a store of value across emerging markets.
Source: https://zycrypto.com/ark-invests-cathie-wood-explains-why-bitcoin-will-ignore-its-traditional-four-year-cycle-this-time/
