Institutional Anchoring and the End of Bitcoin’s Four-Year Cycle

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• They contain (1) a summary of podcast content, (2) potential information gaps, and (3) some speculative views on wider Bitcoin implications.
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Summary

The August 12, 2025 episode of Supply Shock features Adrian Morris arguing that Bitcoin’s historic four-year cycle may be giving way to a slower, stair-step rise driven by ETF adoption, corporate treasuries, and reduced volatility. He links past market extremes more to stimulus-driven speculation than halving events, suggesting current conditions favor quality-seeking capital over risk-curve rotation. The discussion examines institutional incentives, OG holder influence, corporate resilience, and the competitive pressures from Ethereum treasuries.

Take-Home Messages

1. Cycle Evolution: Bitcoin’s historic four-year cycle may be transitioning to a steadier growth pattern anchored by structural demand.
2. Stimulus vs Liquidity: Past volatility was largely stimulus-driven, while current conditions reward quality-seeking rather than speculative capital.
3. Institutional Base: ETF inflows and corporate balance-sheet holdings form a persistent bid that dampens volatility and drawdowns.
4. Whale Impact Diminishing: Large OG holder sales now exert less price pressure due to Bitcoin’s higher market capitalization.
5. Treasury Model Risks: Non-Bitcoin treasury strategies, especially outside Ethereum, face weaker fundamentals and uncertain long-term viability.

Overview

Adrian Morris challenges the assumption that Bitcoin will continue to follow its historic four-year boom-bust cycle, arguing that structural changes are reshaping market behavior. He attributes previous cycle extremes more to government stimulus, which encouraged speculative risk-taking, than to halving events. In contrast, he sees current conditions fostering quality-seeking capital, supported by institutional ETF adoption and corporate treasury accumulation.

He emphasizes that ETF inflows and corporate balance-sheet allocations are building a persistent bid that reduces incentives to rotate out of Bitcoin during market highs. This shift has helped Bitcoin weather macroeconomic and geopolitical shocks that, in earlier cycles, would have caused deep drawdowns. According to Morris, reduced volatility and a maturing asset profile are making Bitcoin more attractive to conservative investors (something we also picked up in our most recent research paper: https://dx.doi.org/10.2139/ssrn.5386623).

Addressing potential downside pressures, Morris notes that while large OG holders can still influence price at cycle peaks, their impact has diminished as Bitcoin’s market capitalization has grown. Corporate treasuries such as MicroStrategy are cited for their ability to hold through downturns, relying on equity issuance and low leverage rather than forced sales. This stands in contrast to the liquidation risks faced by overleveraged miners or individual holders.

The conversation also explores the emergence of Ethereum treasuries, which could benefit from stablecoin growth, while noting that other altcoin treasury models lack the durability of Bitcoin. Morris sees Bitcoin’s trajectory increasingly resembling gold’s gradual post-ETF rise, suggesting a multi-year stair-step pattern rather than rapid, halving-linked surges. This evolution could reframe investment strategies and long-term market expectations.

Stakeholder Perspectives

1. Institutional Asset Managers: Motivated to grow Bitcoin ETF products for fees while opportunistically exploring competing asset classes.
2. Corporate Treasury Managers: Treat Bitcoin as a strategic reserve asset supported by financing structures to manage volatility.
3. Retail Investors: Stand to benefit from reduced volatility but may face competitive entry points due to large institutional bids.
4. Bitcoin OG Holders: Retain some market influence during peaks, though impact is declining with rising market capitalization.
5. Altcoin Treasury Promoters: Seek to replicate the Bitcoin treasury model, particularly with Ethereum, to capture stablecoin-linked institutional interest.

Implications and Future Outlook

If Morris’s stair-step thesis proves accurate, Bitcoin’s price growth could become more predictable, facilitating its inclusion in conservative portfolios and encouraging long-term institutional commitments. This would align Bitcoin’s trajectory more closely with gold’s post-ETF rise, providing macro investors with a familiar benchmark. Such predictability could also reduce speculative excesses that have historically destabilized markets.

However, institutional opportunism remains a potential disruptor. Large asset managers may divert capital into other products, including Ethereum ETFs, if profitability or sentiment shifts, potentially weakening Bitcoin’s dominance in treasury allocations. Monitoring capital flow patterns will be crucial to assessing the durability of this new structure.

Corporate treasury adoption is likely to remain a stabilizing force, though individual firms will vary in resilience depending on leverage and financing strategies. Failures among non-Bitcoin treasuries could reinforce Bitcoin’s unique positioning, but sustained competition from Ethereum treasuries tied to stablecoin infrastructure could reshape market narratives. Policymakers and analysts will need to track these dynamics to anticipate long-term market structure changes.

Some Key Information Gaps

1. How can investors adapt strategies if Bitcoin’s historical four-year cycle is no longer the dominant pattern? Adapting allocation and risk models is vital to optimize returns under a structural shift in market behavior.
2. How much of Bitcoin’s current price stability can be attributed to ETF-driven institutional demand? Clarifying this influence will help assess the sustainability of reduced volatility.
3. What financial structures allow corporate treasuries to withstand deep Bitcoin drawdowns? Understanding these mechanisms can inform assessments of systemic stability.
4. Under what circumstances would institutions rotate significant capital from Bitcoin into competing assets? Identifying triggers can guide strategies to maintain Bitcoin’s market share.
5. What can be learned from gold’s post-ETF price trajectory to forecast Bitcoin’s long-term path? Applying historical analogs can refine projections and investor expectations.

Broader Implications for Bitcoin

Institutionalization of Bitcoin Markets

A persistent institutional bid could shift Bitcoin’s identity from a high-volatility speculative asset to a core portfolio holding for major funds. This evolution would drive changes in custody, settlement, and regulatory frameworks to meet institutional standards. Over time, such integration could entrench Bitcoin as a systemic financial asset influencing broader capital market dynamics.

Corporate Treasury Signaling Effects

As more companies adopt Bitcoin for balance-sheet resilience, the practice may become a competitive signaling tool in capital markets. Firms could use Bitcoin holdings to attract investors aligned with long-term value preservation and technological adoption. This signaling effect may accelerate adoption across sectors, particularly in industries sensitive to inflation or currency risk.

Competitive Asset Class Dynamics

The rise of Ethereum treasuries and other competing asset vehicles introduces a new layer of inter-asset competition. Bitcoin’s ability to maintain narrative dominance in this environment will influence its share of institutional capital flows. Outcomes in this competition could shape the future of digital asset market hierarchies and long-term valuation trends.

Policy and Regulatory Convergence

As Bitcoin becomes more embedded in institutional and corporate finance, policymakers may harmonize regulations across jurisdictions to manage systemic risk. This could lead to standardized disclosure, taxation, and reserve treatment for Bitcoin holdings. Such convergence may enhance transparency but also increase compliance burdens for market participants.