- BTC ETF flows can influence the “cyclicality” of Bitcoin
- Popular analysts claimed that we are less than 40% into the bull cycle
Traditional, Bitcoin [BTC] has a strict four-year market cycle that rises during the halving event. Based on this market cycle theory, altcoin season always starts when capital rotates from BTC to Ethereum [ETH] and finally to the rest of the altcoins.
However, this cycle could change dramatically due to the massive inflows of BTC ETFs into the US.
In a recent one forum During the discussion about the impact of spot BTC ETFs, Leon Marshall, CEO of Galaxy Digital for Europe, emphasized that the ETFs could change the “cyclicality” of Bitcoin.
“I think it will probably change the cyclicality of the Bitcoin industry. That means slightly fewer Bitcoin-ETH-Altcoins as a rotation cycle.”
He added that the next cycle could be driven by “When is the next ETF?”
In other words, Marshall means that the next cycle could be determined by ETF approval, like for ETH. Solana [SOL]Litecoin [LTC]etc.
Bitcoin’s “changed” cycle
Interestingly, Quinn Thompson, founder of Lekker Capital, shared similar observations in a recent podcast with Alex Thorn, head of research at Galaxy Digital. Thompson noted that the ETFs impact BTC in several ways, namely:
“First, it adds correlations; sometimes it can be inversely correlated.”
Thompson also explained that BTC has had some correlations with Nasdaq, technology and AI stocks in the past. On some occasions, BTC has shown correlations with gold, making tracking it from multiple angles crucial for maximum trading potential.
Moreover, he underlined that ETF inflows impact BTC prices to some extent.
“We are tied to the flows of the ETF, and that works both ways.”
When asked what stage the bull cycle is currently at, he added:
“I think we’re later than expected on what people would think of as a traditional four-year cycle.”
On the contrary, Rekt Capital, a pseudonymous crypto researcher and trader on X (formerly Twitter), religiously follows the traditional cycle. At the time of writing, Rekt Capital was to claim that the cycle is only up 35%, meaning a rally of over 60% is expected based on the traditional cycle.
At the time of writing, BTC was hovering around $70,000. Following the traditional cycle and new nuances is critical to spotting opportunities and risks.