Highlights
- Tom Lee believes the Bitcoin four-year cycle is weakening due to ETF-driven institutional demand
- The October 2025 crash cleared excessive leverage and may have reset long-term growth conditions
- ETF inflows and macro liquidity matter more than halvings heading into 2026
For more than a decade, Bitcoin investors have relied on a familiar rhythm. Prices surge after a halving, peak, crash, then quietly rebuild before the next cycle begins. It has been messy, emotional, and surprisingly consistent.
Now that pattern may be under real pressure. According to Tom Lee, the Bitcoin four-year cycle is no longer the dominant force driving price action. Instead, institutional demand, ETFs, and macro liquidity may be rewriting Bitcoin’s rulebook entirely.
Why Tom Lee Believes the Bitcoin Four-Year Cycle Is Fading
Tom Lee recently revived his long-term Bitcoin forecast, targeting $200,000 to $250,000 by the end of 2026. This is not just another bullish price call. It is a structural argument about how Bitcoin behaves as an asset.
Lee argues that the Bitcoin four-year cycle worked best when retail speculation dominated the market. Back then, halvings mattered more because miners and individual traders controlled most supply and demand. Today, that balance has shifted dramatically. Spot Bitcoin ETFs now absorb supply daily, and institutions tend to hold through volatility rather than trade cycles.
The October 2025 Crash Was a Reset, Not a Failure
In October 2025, Bitcoin experienced a sharp drawdown that liquidated roughly $19 billion in leveraged positions across crypto markets. Many saw it as a warning sign. Lee saw something different.
From his perspective, this leverage flush was necessary. Previous Bitcoin rallies in 2020 and 2023 were also preceded by painful cleanouts. Excess leverage disappears, weak hands exit, and long-term capital steps in. Instead of ending the bull market, the crash may have reset conditions for sustainable growth beyond the traditional Bitcoin four-year cycle.
ETFs Are Quietly Replacing the Halving Narrative
One of the strongest arguments against the Bitcoin four-year cycle is the rise of spot Bitcoin ETFs. These vehicles introduce steady, price-insensitive demand that did not exist in earlier cycles.
When pension funds or asset managers allocate to Bitcoin through ETFs, they are not trading halving hype. They are making strategic, long-term allocations. This changes how supply shocks translate into price. Bitcoin becomes less about miner economics and more about portfolio positioning, much closer to how gold behaves.
Bitcoin Is Starting to Trade Like a Macro Asset
Lee also points to Bitcoin’s growing correlation with broader macro trends. Gold surged roughly 65% in 2025 as investors hedged against currency debasement and geopolitical uncertainty. Bitcoin has increasingly been grouped into that same conversation.
Stablecoin issuers now rank among the largest non-central-bank buyers of gold, holding over 116 tonnes as of Q3 2025. That overlap is not accidental. Bitcoin is slowly shifting from a speculative trade into a macro hedge, which weakens the relevance of the Bitcoin four-year cycle.
Regulation and Liquidity Could Define 2026
Another pillar of Lee’s thesis is regulatory clarity. A pro-crypto U.S. stance and potential passage of the CLARITY Act could unlock institutional capital that has remained sidelined due to compliance risk.
At the same time, Lee expects the Federal Reserve to pivot away from quantitative tightening and begin rate cuts in early 2026. Historically, risk assets respond aggressively to easing liquidity. Lee even projects the S&P 500 reaching 7,700 by the end of 2026, signaling a broader risk-on environment that would benefit Bitcoin.
Wall Street Cannot Agree on What Comes Next
Not everyone is convinced the Bitcoin four-year cycle is over. Institutional forecasts for 2026 vary widely.
Bullish analysts align with Lee’s $200,000 to $250,000 range. More conservative outlooks from firms like JPMorgan and Citigroup place Bitcoin between $143,000 and $170,000. Meanwhile, Jurrien Timmer at Fidelity argues that 2026 could still be a classic off-year, with Bitcoin trading between $65,000 and $90,000.
This disagreement highlights the core question investors face. Is Bitcoin still cyclical, or is it maturing into something structurally different?
What Investors Should Actually Watch
Rather than debating price targets, Lee emphasizes one practical metric. Sustained ETF inflows above $500 million per month through Q1 2026 would strongly support the case that the Bitcoin four-year cycle is breaking.
If those flows weaken, traditional cycle dynamics may reassert themselves. Either way, institutional behavior now matters more than miner issuance schedules, a clear sign that Bitcoin has entered a new phase of market evolution.
The Bigger Question Bitcoin Investors Must Answer
The debate around the Bitcoin four-year cycle is no longer academic. It directly impacts how investors manage risk, size positions, and think about time horizons.
If Bitcoin has truly crossed into the macro asset class, the next decade may look less explosive but more durable. That shift may not feel as exciting as past bull runs, but for long-term investors, it could be far more meaningful.
Frequently Asked Questions
Is the Bitcoin four-year cycle officially over?
There is no official confirmation, but growing institutional participation and ETF demand are weakening its historical influence.
Why do ETFs matter so much for Bitcoin price?
ETFs create steady, long-term demand from investors who are less sensitive to short-term volatility and halving cycles.
What price does Tom Lee predict for Bitcoin in 2026?
Tom Lee targets $200,000 to $250,000 by the end of 2026, assuming institutional demand continues.
Could Bitcoin still crash despite institutional adoption?
Yes. Bitcoin remains volatile, and even long-term bullish scenarios can include sharp drawdowns.
What is the most important indicator to watch in 2026?
Monthly Bitcoin ETF inflows. Sustained inflows above $500 million support the cycle-break thesis.
