Does the Four-Year Cycle in Crypto Prevent Visions to Take Form?
The 4-year cycle plays a central role in the crypto space. Everyone is aware of it, perhaps with the exceptions with some newcomers who haven't done any research before plunging in. But even if they research it, they need to experience it to truly understand it. And, as we have seen, it sometimes takes multiple cycles to avoid certain mistakes and do other actions the right way.
For a business, 4 years is a short time. Even for a person. And we do focus significantly on the cycle, maybe too much. The way I see it, we focus on the cycle because it's the only powerful and so far lasting constant in crypto. Well, there are stablecoins too, for their link to the fiat world, but if we want to draw a forced parallel, they aren't as reliable as the cycle being many of them centralized and with at least one major bust in USDT, while the cycle hasn't failed us yet, but it might at some point.
Until then, if that will happen at some point, the 4-year cycle is the constant we have in crypto, and everything else is a succession of an incredible number of project births, rises, shines, and deaths within a cycle or maximum two, with a much smaller set of enduring ones.
Four years is not enough time to realize a vision, even a smaller one. That means that in order to have grand visions unfold in the crypto space, we need to have one of two things happening:
- they must come from the enduring projects, the ones that are left standing after all the shiny ones roll over and die, over and over again, or
- the crypto cycle must fade out in importance over time
The first one seems logical. If you have a project that keeps going, developing, cycle after cycle, its vision (very important to have one) slowly gets realized.
The second one is more of a proxy to the first one. If the crypto cycle fades out in importance, we are less likely to have short-term projects popping up to grab attention and capital, and be gone with the wind, or rather with the bear market.
I'll be honest with you. I don't see the second option materializing any time soon because the crypto space was already categorized as an asset class with a high risk factor, even though in practice things are more nuanced and the "asset class" categorization steals from the shine of an emerging technology, perhaps intentionally. Most investors in crypto also like the cycle because it's constant, predictable. So there is little incentive to change that.
What's left is for the enduring projects to keep cutting their paths through the plethora of fast-burning projects, toward realizing their missions and visions. What's difficult is to get remarked, the more distractions are there.
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I was surprised that the 4 year cycle is not so well known as you might think. Also which years are bull/bear years too. Some even say the cycle isn't a thing! Blasphemous I know. It is for sure the major economic event in Bitcoin. So far it is not seeming the case in crypto unless next year we see something.
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I wouldn't have thought so. But it's possible.
It tends to be different for BTC and the alts, and also, this year seemed to be worse for alts than expected. But, as you said, next year will tell us more.
I think certain crypto will break away from the 4 year cycle within the next two years due to their real life use cases. Prices will rise due to adoption with businesses using those blockchains and their tokens removing themselves from Bitcoins grip. This has to be seen as good news, but then again it will only highlight most crypto has no real use cases or a proven use case and why we need to be constantly researching
It is possible. If we look back at the dot com bubble, only a handful of the companies made it big, and most disappeared. Thanks for dropping by!
I actually didn’t know about the four year cycle but does it really work?
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The four year cycle is almost the first thing that I tell people about, right after explaining this is what a blockchain is. Most people get it.
I agree, but often experiencing it is different than knowing about it theoretically. Thanks for your comment!
I think the 4 year cycle won't last forever. I hope it stays around for longer, but with the ETFs, I just don't see that being the case. The big financial institutions have a reason to manipulate prices if they need to now.
I tend to believe big institutional players (probably except pension funds, assurance companies, and some countries), like the high volatility and even the widely-known cycle, because they can make more money this way by providing the infrastructure for investors to gamble.
I think the first option over time will also create a better standard in terms of the criteria or quality new projects need to aim for when launching in the crypto space, especially if they want to succeed.
In a way, four years can be a long time, when viewed from the seemingly rapid technological progress and evolution the digital space is experiencing.
Love the image, I'll say it's epic :)
Sustainable projects over long term is indeed something to aim for. You are right that technological speed of progress has grown exponentially, and 4 years can feel like a long time, but I'd say not even in AI is enough time to reach a full vision.
I loved it too. I wonder if it's real, edited, or AI generated. It would be even more impressive to be real.
Yes, despite the rapid speed of changes, it still takes time to create, build and develop new innovations, and also there's adoption of such innovations too.
It's hard to tell, even after looking at it closely. I think it's probably real.
Indeed. Adoption takes time too. And then, iterating on the idea, if it's promising, to build something even more impressive.
People who have really studied the market cycle over the years wouldn't want it to change, it being predictable is profitable, although I think the market will become better, maybe in the future, I don't know, but for people who have made a lot of money, I doubt they'll want it t change.
I had the same opinion. But it may be a divergence between the desire of profit and what this space may need to truly become revolutionary.
Well, 80% of time I think people prefer profit to evolution
Probably. But without evolution, sources of profit dry out eventually. So they need to be like locusts, feed off a crop until it's over and move on to the next one. Which is not great, certainly not for the crops and their owners.
In crypto people will like predictable and the four year cycle makes them feel good I suppose. It will be interesting to see if it sticks to the cycle, it may well change things up. Right now those pump and dump projects aren't doing as well, there are always a few exceptions but I'm not investing in any of the very high risk things right now.
Interesting post, we shall see if the predictable remains so this time around!
I'd say it's still quite predictable, even if it varies to some degree from one cycle to another. Too soon to tell if pump & dumps are doing well or not this cycle. They had their moments during the first bull run, and I expect they will have them again during the hype phase. But it would be better if capital would seek more serious projects and that their owners/developers deliver on their promises.
Social media + gaming are our chance to step outside of the four year cycle of BTC halving. That is why I invest in and wish for the success of the things we are building on HIVE. There is another 4 year cycle with the money supply I have seen some analysts talk about. It is not as deterministic as BTC halving. I still consider it as worth keeping an eye on as there is a clear correlation with asset prices and money supply (global).
It's one of them. But something that breaks the barrier between crypto and fiat and becomes a link between the two worlds through tokenization at big scale has a higher chance of breaking the cycle, imo.
I didn't know it forms a 4-year cycle, but global liquidity levels have often been correlated with risk-on assets. The question is which influences which. Does flight to safety grow the money supply while reducing the prices of risk-on assets? I think so. Does a move toward risk-on assets reduce money supply and increase the prices of risk-on assets? I think that's logical too. So, to me, the two cycles seem correlated.