- BTC ETF flows could impact Bitcoin’s “cyclicality”
- Popular analyst claimed we’re less than 40% into the bull cycle
Traditionally, Bitcoin [BTC] has a strict four-year market cycle that surges during the halving event. Based on this market cycle theory, altcoin season always starts as capital rotates from BTC to Ethereum [ETH] and finally, to the rest of the altcoins.
However, this cycle could change immensely due to massive U.S spot BTC ETF inflows.
In a recent forum discussion on the impact of spot BTC ETFs, Galaxy Digital CEO of Europe, Leon Marshall, highlighted that the ETFs could alter Bitcoin’s “cyclicality.”
“I think it will probably change the cyclicality of Bitcoin’s industry. That means slightly less Bitcoin-ETH-Altcoins as a rotational 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, such as for ETH, Solana [SOL], Litecoin [LTC], etc.
Bitcoin’s “altered” cycle
Interestingly, Quinn Thompson, founder of Lekker Capital, shared similar observations in a recent podcast with Galaxy Digital’s Head of Research, Alex Thorn. Thompson noted that the ETFs impact BTC in several ways, namely,
“One, it adds correlations; sometimes, it could be inversely correlated.”
Thompson also expounded that BTC had some past correlations with Nasdaq, tech, and AI stocks. On some occasions, BTC showed correlations with Gold, which makes tracking it from multiple angles crucial for maximum trading potential.
Additionally, he underscored that ETF inflows have an impact on BTC prices to some extent.
“We’re beholden to the flows of the ETF, and that cuts two ways.”
When asked what stage the bull cycle is at the moment, he added,
“I think we’re later on what people would think as a traditional four-year cycle than expected.”
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 claiming that the cycle is only up 35%, meaning that a rally of over 60% is expected based on the traditional cycle.
At press time, BTC was hovering at around $70K. Tracking it from the traditional cycle and new nuances is critical to spotting opportunities and risks.