Bitcoin’s Four-Year Cycle Tested After $126K Peak and $24bn ETF Inflows

Bitcoin’s journey through 2025 proved to be a period of heightened volatility, ultimately ending the year broadly where it began. The cryptocurrency reached a new all-time high of approximately USD 126,000 in early October, supported by growing optimism around regulation and strong inflows into newly launched spot Bitcoin exchange-traded funds (ETFs). However, these gains were reversed in the fourth quarter as over-leveraged positions were unwound and risk-off sentiment took hold, pushing Bitcoin down from its October peak to lows below USD 86,000 by late November.

Farhan Badami, Market Analyst at eToro, said that despite the turbulence, several positive trends continued to underpin the crypto market throughout the year. Institutional adoption and market infrastructure strengthened in 2025, even as prices fluctuated sharply. Spot Bitcoin ETFs highlighted this shift, with the iShares Bitcoin ETF recording USD 24 billion in inflows, making it the fifth-highest ETF globally by inflows this year and underscoring sustained institutional demand.

Beyond price movements, major financial institutions accelerated experimentation with blockchain-based payments and tokenised assets, further anchoring cryptocurrencies within real-world financial systems. While overall price performance was mixed, the broader crypto ecosystem continued to mature, laying an important foundation as the market transitions into the new year.

Historically, Bitcoin has followed a four-year cycle closely linked to its halving events, which reduce new supply issuance approximately every four years. However, 2025 has challenged this pattern, with Bitcoin entering the final days of the year down around 6%.

According to Badami, this places greater emphasis on a year-end rally to preserve the historical cycle. A failure to do so may suggest that Bitcoin’s long-standing patterns are beginning to shift. Rather than signalling weakness, this could reflect a maturing market increasingly driven by fundamentals rather than cycle-driven speculation.

Growing institutional participation, including large ETF allocations and corporate treasury holdings, has the potential to dampen extreme volatility and extend market cycles. Bitcoin’s volatility has gradually declined, while its correlation with traditional assets has increased as mainstream investors integrate digital assets into diversified portfolios.

This market maturity is also evident at a regional level, with interest in digital assets accelerating rapidly across the UAE, positioning the country among the world’s leading markets for crypto adoption and usage. Progressive regulatory frameworks have played a key role in accelerating adoption and fostering innovation across the digital asset ecosystem.

Looking ahead to 2026, the crypto sector continues to evolve as more financial activity moves on-chain, spanning tokenised funds and real-world assets. Supported by clearer regulation and growing participation from banks and fintech firms, crypto is increasingly being viewed not as a short-term trade, but as a long-term allocation within a diversified investment portfolio.