Bitcoin’s four-year cycle provided a simple scenario in which halving rewards meant scarcity, and scarcity meant rising prices.
This pattern continued for more than a decade. Every four years, the network's rewards to miners were cut in half, which tightened supply, followed by a frenzy of speculation that sent prices to new all-time highs.
But with Bitcoin hovering just above $100,000 this week, down about 20% from its October high of more than $126,000, that old story is fading.
Wintermute, one of the largest market makers for digital assets, has made the quiet part louder. “Four-year cycles based on halvings no longer make sense,” the company argued in a recent note. “Liquidity is what's driving performance right now.” While this statement may sound heretical to long-time Bitcoin believers, the data leaves little room for debate.
Currently, the market is dominated by ETFs, stablecoins, and institutional liquidity flows, and there appears to be a rounding error in miner issuance.
Liquidity rewrites the rules of the four-year cycle
Bitcoin's recent rise and fall has been tied neatly to one metric: ETF inflows. Global crypto ETFs raised a record $5.95 billion in the week ending October 4, with U.S. funds accounting for the bulk of the money. Just two days later, daily net inflows reached $1.2 billion, an all-time high.
This flood of funds coincided almost perfectly with Bitcoin's rise to an all-time high near $126,000. As capital inflows slowed in the second half of the month, the market slowed as well. By early November, Bitcoin had retreated toward the $100,000 line as ETF share prices were mixed and outflows were mild.
This similarity is striking, but not coincidental. For many years, the halving was the cleanest model investors had for how Bitcoin's supply and demand worked. Every 210,000 blocks, the number of new coins given to miners is halved.
Since the April event, that figure has been 3.125 BTC per block, or about 450 new coins per day, equivalent to about $45 million at current prices. This may sound like a lot of supply every day, but it doesn't seem small given the sheer size of institutional investors currently circulating through ETFs and other financial products.
If just a handful of ETFs can absorb $1.2 billion in Bitcoin in a day, that inflow would be 25 times the amount of new supply entering the market each day. Even routine weekly net flows often match or exceed one week's worth of newly minted coins.
The problem is not completely gone, as halving still has a significant impact on miners' economics. However, from a market price perspective, the calculations have changed significantly. The limiting factor is not how much new coins are produced, but how much capital flows through regulated channels.
Stablecoins add another layer to this new liquidity economy. The total supply of dollar-pegged tokens currently hovers between $280 billion and $308 billion, depending on the data source, effectively serving as base money for the crypto market.
Stablecoin float growth has historically tracked rising asset prices, providing new collateral for leveraged positions and providing instant liquidity to traders. Where halvings limit the faucet for new Bitcoin to flow in, stablecoins open the floodgates for demand.
A market dominated by flow
Kaiko Research's October report captures that change in real time. In mid-month, a sudden wave of deleveraging wiped out more than $500 billion in cryptocurrency market capitalization as order book depth evaporated and open interest reset to lower levels. This episode had all the hallmarks of a liquidity shock rather than a supply squeeze.
The price of Bitcoin fell not because miners were dumping coins or because a new halving was approaching. It fell as buyers disappeared, derivatives positions were unwound and the thin order book amplified any sell orders.
This is the world Wintermute depicts. A world ruled by capital flows, not block rewards. The advent of spot ETFs in the US and widespread expansion of access by institutional investors has rewired Bitcoin price discovery. Capital flows from major funds are currently driving the trading session.
Now, price increases typically begin during US times when ETF activity is at its highest. This is the structural pattern that Mr. Kaimitsu has been tracking since the product was released. European and Asian liquidity are still important, but now serve as a bridge between the US sessions rather than independent centers of gravity.
This change also explains the change in market volatility. In early halvings, rallies tended to go through a long and tough accumulation phase, with retail enthusiasm on top of shrinking supply.
Now, depending on whether an ETF has high inflows or outflows, its price can soar by thousands of dollars in a single day. Liquidity is institutional, but it is also fickle, turning what was once a predictable four-year cycle into a market with short, sharp liquidity cycles.
This volatility is likely to continue. CoinGlass's forward funding and open interest data shows that leverage remains a significant variable, amplifying moves in both directions. If funding rates remain high for an extended period of time, it indicates that traders are paying too much money to stay for the long term, increasing the likelihood of a sharp reversal in the market if flows pause.
October's drawdown, which followed soaring funding costs and a wave of ETF redemptions, showed how fragile structures can be when liquidity dries up.
But even as those flows cool, structural fluidity within the system continues to increase. Stablecoin issuance is still increasing. The FCA’s recent action to allow retail investors in the UK access to crypto-listed bonds has sparked a fee war among issuers and led to an increase in turnover on the London Stock Exchange.
Each of these channels represents a different conduit for capital to reach Bitcoin, thereby strengthening its correlation with the global liquidity cycle and moving it further away from a self-contained halving cycle.
The Bitcoin market currently operates like any other large asset class, with financial conditions driving performance. Halving calendars used to dictate the tempo of investor sentiment. Today, it is the Federal Reserve, ETF creation desks, and stablecoin issuers that set the beats.
In the coming months, Bitcoin’s trajectory will depend on liquidity variables. In the base case, Bitcoin is expected to fluctuate between approximately $95,000 and $130,000 as ETF flows remain modestly positive and stablecoin supply continues to expand modestly.
A more bullish setup, such as another record week of ETF inflows or a regulatory green light for new listings, could send the price back above $140,000.
Conversely, a liquidity air pocket marked by days of ETF outflows and shrinking stablecoin supply could send Bitcoin back into the $90,000 zone as leverage resets again.
None of these results depend on miner issuance or distance to halving. Instead, they depend on the speed at which capital moves in and out of the pipe, which has been replaced by the halving as Bitcoin's primary throttle.
The impact extends beyond price. Kaiko's data also suggests that ETFs have also changed the microstructure of the spot market itself, tightening spreads and deepening liquidity during U.S. trading hours, but leaving it less liquid than before after hours.
This change means that the health of the Bitcoin market can now be assessed not only by on-chain supply metrics, but also by ETF creation and redemption activity. When a miner's daily output is absorbed into an ETF within minutes, it is clear where the balance of power lies.
Bitcoin's evolution into a liquidity-sensitive asset may disappoint those who once viewed the halving as some kind of cosmic event, a countdown to preordained wealth. But for assets currently held by institutional investors, benchmarked in ETFs, and traded in stablecoins that serve as private sources of money, it's simply a sign of maturity.
So maybe the halving cycle isn't over, just demoted.
Block rewards still cut in half every four years, and some traders always use that as a guide. But the real map is now elsewhere. If the past decade taught investors to watch the halving clock, the next decade will teach them to watch the flow tape.
Bitcoin's new calendar is not 4 years. It is measured in the comings and goings of ETFs, the stablecoins issued or redeemed, and the billions of dollars of capital seeking liquidity in a market that has grown beyond myth. Miners still keep time, but now tempo is determined by money.
