New Thoughts on Bitcoin Cycles

Many people are discussing when Bitcoin will enter the next bull market, but I recently came across an interesting perspective — perhaps the driving force isn't the halving, but the debt cycle.

Since the 2008 financial crisis, the Federal Reserve's conventional approach has been zero interest rate debt issuance. Over the next 3-5 years, these debts have been rolling over, with interest accumulating. To address this issue, each cycle requires large-scale liquidity releases to pay down debt. Looking back with this logic, the economy indeed exhibits a 4-year sine wave cycle — industrial activity and business climate indices reflect this pattern, perfectly driven by the debt cycle.

So why didn't we see the expected bull market in 2025? The answer lies in changes to the debt structure. Due to adjustments in interest rate expectations, the average maturity of U.S. Treasuries has extended from 4 years to now 5.4 years. This isn't a minor extension — the entire economic cycle has been lengthened in sync.

In other words, we are still in the upward phase of the cycle, but the peak isn't this year; it’s expected to occur at the end of 2026. Moreover, based on current liquidity forecasts, an additional $8 trillion in liquidity could be released over the next 12 months. This means the upward phase has just begun.

So don't rush — the cycle is still in progress, just at a slower pace than expected.