Bitcoin Is Now Tied To A 2-Year Cycle, Warns Investment Firm CIO
Bitcoin’s well-known four-year halving rhythm is giving solution to a shorter, ETF-driven efficiency clock, argues ProCap Chief Investment Officer (CIO) Jeff Park in a brand new Substack essay. In his view, the dominant drive in Bitcoin’s boom-bust dynamics is shifting “from mining economics to fund-manager economics,” with a brand new “two-year cycle” anchored in ETF flows and institutional return hurdles.
Park begins by declaring that the traditional pattern built around halvings belongs to “the previous Bitcoin.” Historically, programmed provide cuts compressed miner margins, pushed weaker operators out and lowered structural promote stress. Combined with a robust narrative, every halving triggered a reflexive loop of “early positioning, rising costs, media virality, retail FOMO and leveraged mania” that resulted in a bust.
That mechanism, he argues, is now considerably diluted. With most of Bitcoin’s eventual provide already circulating, every halving shaves off a smaller fraction of the entire float. The “diminishing marginal inflation impression” means the issuance shock is simply too small to reliably drive the following cycle by itself.
The ETF-Driven 2-Year Bitcoin Cycle Begins
Instead, Park contends that Bitcoin is more and more ruled by how skilled allocators behave inside ETF wrappers. He brazenly labels his framework as resting on “three heavy-handed, contestable assumptions.”
First, most institutional traders are de facto evaluated over one- to two-year horizons due to how liquid fund funding committees function. Second, new internet liquidity into Bitcoin will probably be dominated by ETF channels, making them the principle footprint to look at. Third, the promoting conduct of legacy “OG whales” stays the most important provide variable, however is handled as exogenous to his ETF-centric evaluation.
Within this lens, two ideas matter most: common-holder danger and calendar-year P&L. Park notes that when “everybody owns the identical factor,” flows can amplify each rallies and drawdowns. But he focuses on one thing simpler to watch: the best way annual efficiency crystallizes on December 31. For hedge funds particularly, “when volatility will increase in direction of the top of the yr” and there isn’t sufficient P&L “baked in,” managers change into extra prepared to promote their riskiest positions. The alternative, he writes, is commonly “the distinction between getting one other shot to play in 2026, or getting fired.”
Park leans on Ahoniemi and Jylhä’s 2011 paper Flows, Price Pressure, and Hedge Fund Returns, highlighting its discovering that a big share of hedge-fund “alpha” is flow-driven and that return–reversal cycles stretch “virtually two years.” This, he says, gives a blueprint for the way liquidity and efficiency feedbacks may construction Bitcoin’s ETF period.
He then sketches how a CIO would possibly promote Bitcoin internally: as an asset anticipated to ship one thing like a 25–30 % compound annual return. On that foundation, a place should generate roughly 50 % over two years to justify its danger and charge drag. Park references Michael Saylor’s “30% CAGR for the following 20 years” as a tough institutional hurdle.
From there he builds a three-cohort thought experiment. Investors who bought via ETFs from inception via year-end 2024 are up round one hundred pc in a single yr, successfully having “pulled ahead 2.6 years of efficiency.”
A second cohort that entered on 1 January 2025 is roughly 7 % underwater, now needing “80%+ over the following yr, or 50% over the following two years” to hit the identical hurdle. A third group, holding from inception via the top of 2025, is up about 85 % over two years—solely barely forward of its 30 % CAGR goal. For that group, Park says, the reside query turns into: “Do I promote and lock it now, or do I let it run longer?”
ETF circulation information sharpen the image. Park highlights that Bitcoin now trades close to “an more and more necessary worth, $84k,” which he characterizes as roughly the combination price foundation of ETF flows thus far. While 2024 inflows carry substantial embedded positive aspects, “virtually not one of the ETF flows in 2025 are within the inexperienced,” with March as a partial exception.
October 2024, the most important influx month, noticed Bitcoin round $70,000; November 2024 closed close to $96,000. On a 30 % hurdle, Park estimates one-year targets of roughly $91,000 and $125,000 {dollars} for these vintages. June 2025 inflows close to $107,000 suggest a $140,000 goal by June 2026.
He argues that Bitcoin ETF AUM is now at an “inflection level,” the place a ten % worth drop would drag whole AUM again to roughly its degree initially of the yr. That would go away the ETF complicated with little to point out, in greenback P&L, for 2025 regardless of taking over significant danger and inflows.
The key takeaway, Park writes, is that traders should monitor not solely the common ETF price foundation, but additionally “the transferring common of that P&L by classic.” Those rolling revenue profiles will, in his view, change into the principle “liquidity pressures and circuit breakers” for Bitcoin, eclipsing the previous four-year halving template.
His second conclusion cuts towards retail instinct: “If Bitcoin worth doesn’t transfer, however time strikes ahead, that is finally dangerous for Bitcoin within the institutional period.” In a fee-and-benchmark world, flat is just not impartial; it’s underperformance versus the 30 % ROI that justified the allocation. That alone can set off promoting.
“In abstract,” Park concludes, “the 4-year cycle is certainly over.” Bitcoin will nonetheless be pushed by marginal demand, marginal provide and profit-taking. But “the patrons have modified,” and with halving-driven provide shocks much less decisive, it’s the extra “predictable” incentives of ETF managers—expressed over roughly two-year home windows—that will now outline Bitcoin’s market cycle.
At press time, Bitcoin traded at $87,559.
