Market Trends Shaped by Institutional Investment
Recent analyses from Bitise and Cryptoquant suggest that rising institutional investment is significantly altering the market landscape.
Bitcoin (BTC) is often discussed in the context of its four-year cycle, a perspective supported by different assessments from industry executives.
In a post on X dated July 25th, Cryptoquant’s CEO Ki Young Ju stated that “Bitcoin cycle theory is dead.” He pointed out that historically, large holders would sell Bitcoin to retail investors at peak prices. However, this time, these so-called “whales” are selling to more resilient investors.
“Currently, older whales are offloading to newer, long-term holders. Institutional adoption seems to be more substantial than we anticipated. Honestly, it feels like trading has lost its significance. Holders are now outweighing traders,” Ju mentioned in his post.
He believes this shift disrupts traditional trading strategies that rely on cyclical patterns among retail investors. “I think I missed the mark by overlooking this change in the dynamics of the bull cycle,” he admitted. “If what I say influences your investment decisions, I sincerely apologize.”
Despite this, the market hasn’t completely disregarded Ju’s prior assertions. Back in early April, when Bitcoin was priced around $84,000, he warned that even if the bullish trend seemed to dissipate, there was a likely rise in the realization cap.
Ju interpreted these signals as indicative of a bear market. However, Bitcoin continued its ascent, exceeding $120,000 by July and achieving multiple highs during the month.
Changing Perspectives
Leaders in the crypto space are not the only ones questioning established models. Other veteran market observers are raising doubts about the sustainability of Bitcoin’s four-year cycle. Bitwise Chief Investment Officer Matt Hougan noted that the underlying forces that generated the previous cycle appear to be weakening.
“These effects diminish with each repetition,” Hougan asserted in a post on X, emphasizing external factors like interest rates and regulatory risks that are influencing the current market.
At the same time, a more enduring presence of institutional capital is emerging, he argued. For instance, there’s a steady flow of money toward spot ETFs, growing interest from institutional entities, and gradual development of crypto infrastructure within Wall Street.
“We anticipate significant regulatory advancements beginning in January 2025, which will unfold over several years. The financial sector is now investing heavily in crypto, particularly following the passage of the Genius Act this month,” he added.
Consequently, Hougan suggested that the market might experience a “sustained, stable boom” rather than another sudden “supercycle.”
Notably, the Genius Act—focused on regulating stablecoins—was signed into law by President Donald Trump last Friday. Meanwhile, other significant legislative efforts aimed at clarifying broader market structures are moving through Congress but have yet to be enacted into law.
