BitMEX Alpha: This time is no different, the crypto cycle will not fail

"Every time we hear 'this time is different', the cycle ultimately proves 'there is no difference'."

Every four years, the Bitcoin market follows an extremely consistent rhythm, shaped by a native code of Bitcoin: the halving of mining rewards. Approximately every 210,000 blocks, the network halves the mining rewards, thereby slowing down supply (deflation).

Historically, each halving has led to the same sequence: accumulation → parabolic rise → speculative peak → crash and recovery.

● 2012-2014: The first halving initiated Bitcoin's earliest true bull market, pushing the price from double digits to over $1,000, followed by the collapse of Mt. Gox, marking the first major bear market.

● 2016-2018: The second halving led to the super frenzy of 2017 and the ICO bubble, followed by the 2018 bear market triggered by regulatory crackdowns in China and rampant token issuance (projects crazily harvesting profits).

● 2020-2022: The third halving opened the "institutional era" of cryptocurrencies—MicroStrategy, Tesla, and ETFs entered the market—and peaked in 2021. This was followed by the crash in 2022, driven by the cascading failures of LUNA, Three Arrows Capital (3AC), and FTX.

● 2024 to present: The most recent halving occurred on April 19, 2024, reducing the block reward to 3.125 BTC. We are currently in the middle of the fourth cycle.

The repetition of this pattern is so precise that some analysts estimate that market peaks typically occur within 12-18 months after each halving, around the middle of the 4-year cycle.

We believe this cyclical pattern arises from Bitcoin's native logic and the characteristics of the cryptocurrency industry:

We've heard "this time is different" before— the unfulfilled "supercycle"

If the phrase "the cycle is dead" sounds familiar, it's because we've experienced it before.

During the bull market of 2020-2021, the crypto industry collectively touted the so-called supercycle argument—namely, that Bitcoin and various leading cryptocurrencies had matured, shedding their "boom-bust" characteristics, and we would see "only up" (up only). The protocol advancements in blockchain technology, along with the unprecedented liquidity explosion in sectors like NFTs, GameFi, and DeFi, seemed to prove that "this time is different."

This argument seemed reasonable at the time. Tesla added Bitcoin to its balance sheet, Musk promoted Dogecoin (DOGE) on live TV, and "diamond hands" became a badge of honor, with retail investors making profits. DeFi and NFTs were rewriting the rules of on-chain finance. Many KOLs predicted that with so many new players and applications, Bitcoin and even leading altcoins would no longer suffer the kind of 70% drawdowns seen in the past.

But the "supercycle" ultimately could not sustain itself due to its own overheating. What followed was a brutal reminder, revealing the deep-rooted nature of crypto cycles: the death spiral of LUNA/UST, the liquidation of Three Arrows Capital, and the bankruptcy of FTX wiped out hundreds of billions in market value, with Bitcoin itself plummeting nearly 80% from its peak.

Today, a more subtle form of similar optimism has returned; with spot ETFs, institutional inflows, and deeper liquidity, the market seems to have finally escaped the "boom-bust" rhythm. But history rarely exits so easily. The kind of confidence seen at the peak in 2021 is echoing once again.

Why cycles still exist— the structural logic of cryptocurrencies

Even with ETF inflows and Wall Street infrastructure, cryptocurrencies are inherently a deeply cyclical industry.

The expansion mechanism of cryptocurrencies makes it inevitable. When market sentiment turns bullish, new coins (meme coins) emerge overnight, projects easily raise millions, and liquidity floods into perpetual contracts and leverage. This explosive growth in issuance and leverage drives prices up—until it can no longer be pushed.

The perpetual contract trading volume dominates, meaning price action is not only constrained by real demand but also by liquidation mechanisms. High leverage makes price manipulation seem effortless, while crashes can be catastrophic. The reflexivity of this industry—where narratives drive prices and prices feed back into narratives—ensures overextension in the market.

Ultimately, new supply of tokens (unlocking/inflation), dilution of attention, and fatigue from excessive leverage will erode momentum. When the last buyer disappears, the structural features that built the rally will begin to reverse. This built-in feedback loop ensures that cryptocurrencies cannot escape cycles—they are a manifestation of cycles themselves.

Current Bitcoin— underperforming mainstream assets and hidden cracks

We believe the cycle is still at work, with an "invisible hand" behind the price action for the following reasons: despite favorable news such as the approval of spot ETFs in 2025, institutional inflows, and record highs in gold and stock prices, Bitcoin has almost underperformed all other major assets. The only reasonable explanation seems to be Bitcoin's 4-year cycle.

● Driven by easing global liquidity and inflation concerns, stock markets in the U.S., China, South Korea, and Japan have risen about 20-30% year-to-date (YTD).

● Gold has repeatedly set historical highs, rising 50% YTD, solidifying its status as a safe haven.

● In contrast, Bitcoin has only risen about 9% YTD, still failing to break above its 2021 highs.

If the cycle truly ended, Bitcoin should have led this "risk-on" environment, rather than lagging behind. Its relative weakness suggests we are approaching the final stages of the cycle—cooling and recovery. Further evidence is that the crypto ecosystem is once again showing internal "cracks," signaling a deep correction that belongs solely to the crypto market.

From October 10 to 11, 2025, the crypto market experienced the largest liquidation cascade in history, wiping out nearly $19 billion in leveraged positions within 24 hours. Market makers and proprietary trading desks were forced to unwind, triggering a widespread flash crash in altcoins. A few weeks later, Stream Finance, a DeFi protocol with a total value locked (TVL) that once reached hundreds of millions, disclosed a loss of $93 million, froze withdrawals, and its xUSD stablecoin subsequently crashed by over 70%.

These are not macro shocks. They are crypto-native fractures, surfacing precisely when leverage, complacency, and cyclical fatigue converge—just like past cycles.

The cycle will continue— an unpopular perspective

We suggest traders consider an alternative viewpoint: what if the established crypto cycle is still valid?

Each halving remains significant. Each bull market still tends toward excess. Each crash still provides a reset (washout). Bitcoin's recent performance and the re-emergence of structural cracks may not be anomalies—they may precisely confirm that the underlying rhythm remains intact.

Whether the next explosive rally occurs in six months or a year, the same internal logic may still guide it. And when the market once again insists "this time is different," historical cycles may quietly and predictably provide a strong counterargument.

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