Bitcoin and the Four-Year Cycle(?)
Key points
- Bitcoin's history is relatively short, so trying to draw any conclusions regarding seasonality is admittedly risky
- That said, it doesn't hurt to be aware of some interesting trends that have developed
- While the sample size is minuscule, there appears to be a four-year cycle in the making
Does Bitcoin have a four-year cycle?
Bitcoin started trading in 2010, so there is only fifteen years of history to work with. Likewise, virtually any seasonal pattern we might discover is done so with the benefit of hindsight. Finally, talking about a four-year cycle with only fifteen years of history implies a tiny sample size. Nevertheless, with those caveats in mind, I'll show you what I've found, and you can decide for yourself if there might be anything to it.
With the aforementioned benefit of hindsight, we will start our test on January 1st, 2011, and call 2011 Year #1 in our four-year cycle. 2012 is Year #2, 2013 is Year #3, and 2014 is Year #4. Then the cycle starts anew with 2015 as Year #1. Does it really matter? Historically, yes (at least so far). In the future, who knows?
The Results
Year #1: This includes 2011, 2015, 2019, and 2023.
The chart below displays Bitcoin performance only during Year #1. The cumulative gain for Bitcoin held only during Year #1 was +9,406%.
Year #2: This includes 2012, 2016, 2020, and 2024.
The chart below displays Bitcoin performance only during Year #2. The cumulative gain for Bitcoin held only during Year #2 was +6,204%.
Year #3: This includes 2013, 2017, 2021, and 2025 to date.
The chart below displays Bitcoin performance only during Year #3. The cumulative gain for Bitcoin held only during Year #3 through October 21st of this year is +150,111%.
If we combine Years #1, 2, and 3, the chart below displays the hypothetical growth of $1 held in Bitcoin only during these three out of every four years. The cumulative gain for Bitcoin held during Years 1, 2, and 3 is a fairly ridiculous +905,213,698% (a nice return if you can get it).
The outlier: Year #4
Our historical look at Year #4 includes 2014, 2018, and 2022. The next Year 4 in line is 2026. Should we be concerned about Bitcoin's prospects in 2026? Again, we report, and you decide.
The chart below displays Bitcoin performance only during Year #4. The cumulative return for Bitcoin held only during Year #4 is -96%.
Summing up the results so far
The table below displays Bitcoin's year-by-year results, broken out by each year in the (for now, purported) four-year cycle.
The outlier nature of Year 4 performance so far is obvious. The chart below illustrates price action related to the purported four-year cycle.
What the research tells us…
No one should assume that the purported four-year cycle suggested here will continue as it has so far in Bitcoin's short history ad infinitum into the future. But it is a cycle worth watching. More importantly, the history above suggests that if Bitcoin's price action breaks lower in 2026, investors may be wise not to fight that trend.