According to Sandeep Nailwal, co-founder of Polygon, the four-year crypto market cycle that traders and investors are used to, is no longer noticeable due to the maturation of crypto as an asset class and institutional participation.
In a recent episode of the Cointelegraph chain reaction, Nailwal said overall speculative activity has declined due to high and low-liquid conditions in the US, but will recover once interest rates are reduced and the Trump administration settles into a new role.
Though interest rates at the Treasury have declined significantly in 2010, interest rates remain relatively high. Source: TradingView
Nailwal expects a 30-40% drawdown between cycles and expects Bitcoin (BTC) to have some impact on the market, adding that the four-year cycle is not noticeable. Nailwal said:
“We’ve generally seen 90% drawdowns between cycles, which is very normal in cryptography. These drawdowns aren’t noticeable, and I feel a little more specialized and more mature, especially with blue chip crypto assets.”
The founders of Polygon concluded that if the upward trend and crypto market experience long-term bull running, capital will turn from larger cap assets to smaller cap assets.
Related: BTC’s dominance has steadily risen since 2023, but is Altseason a relic now?
Other destroyers in the 4-year cycle
US President Donald Trump’s executive order establishing a strategic Bitcoin reserve is one of the factors that market analysts say is skewing the four-year market cycle.
The custody policy from the Trump administration has legalized the codes in the eyes of institutional investors.
It will be played on Crypto ETF in the week of March 21st. Source: Coinshares
The emergence of Exchange-Traded Funds (ETFS) disrupts the four-year cycle by supporting the price of digital assets that have isolated the capital of ETFs and their investment vehicles.
Because ETFs are traditional financial products that do not provide the owner with underlying digital assets, these investment instruments prevent capital from freely rotating into other assets.
Macroeconomic pressures and geopolitical uncertainty have devastating effects on the market cycle as investors escape risk-on assets of more stable alternatives, such as cash and government securities.
Magazine: As Trump’s poll improves, Bitcoin will “start rip”: Felix Hartman, X-Hole of Frame
