The four-year Bitcoin (BTC) market cycle of forming new all-time highs followed by deep corrections is not dead, contrary to popular belief, according to Xapo Bank CEO Seamus Rocca.
In an interview with Cointelegraph, the CEO said that the risk of a prolonged bear market is still very real and does not need a “cataclysmic” event to trigger it. Things as simple as a general slowdown in news, developments, or routine portfolio rebalancing could cause the next market-wide downturn. He added:
“We all want to think that Bitcoin is an inflation hedge, and I believe that it will be that inflation hedge one day. But I'm not sure we're there yet. I still see it very much as a risk-on asset. At least that correlation between Bitcoin, the S&P, and stocks is still very much there.”
“The contagion effect could be as simple as there's no new news in the market,” causing the crypto sector to “run out of steam,” in an organic, drawn-out process, the CEO added.
Some Bitcoin investors, industry executives, and crypto market analysts say that the four-year market cycle is dead or has shifted to the point where sharp, prolonged cyclical corrections are no longer likely due to the presence of institutions and the maturation of crypto as an asset class.
Institutional buying won’t save markets from the historical trend
“So many people are saying, ‘Oh, the institutions are here, and, therefore, the cyclical sort of nature of Bitcoin is dead.’ I'm not sure I agree with that,” Seamus Rocca told Cointelegraph.
The CEO’s perspective has been echoed by others in the industry, including Bitcoin educator and analyst Matthew Kratter and author of “The Bushido of Bitcoin,” Aleksandar Svetski.
“Human psychology will never change. Cycles have nothing to do with Bitcoin and everything to do with people. The same boom and crash will happen this time,” Svetski wrote in a June 15 X post.
Others, like venture capital (VC) firm Breed, warn that overleveraged Bitcoin treasury companies could spark the next bear market.
However, analysts at the VC firm also said that the contagion may be limited if most of these treasury companies continue to finance their Bitcoin buys primarily through equity rather than debt.
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