Bitcoin is an asset that has a distinct cycle defined by the every four-year supply issuance halvings. One of the ways that some folks try to get a sense of where Bitcoin is headed is to watch patterns of growth and retreat in the period following a halving. This has lead to some famous theories – the most notable being Plan B’s S2F model. Interestingly, however, some are wondering if the pattern is breaking down. As you can see in the chart below, Bitcoin is now trading outside the range of both the first and the second halving.
Should Bitcoin continue its trajectory down, it would add more fuel to the fire saying that these theories shouldn’t guide our expectations. That isn’t all bad news, however. For those of you worrying about protracted, multi-year bear markets now, never fear. Some analysts have argued that Bitcoin has matured to the point where cycles are unlikely to stay in this larger four-year paradigm and that there are likely to be much more frequent shorter cycles. The reality is that no one knows for sure, and Bitcoin just loves to surprise us.