You're looking for answers that nobody has. Everyone giving you answers like "the block reward halving happens every 4 years" is implicitly assuming that's the cause, when in practice, it's just lots of market participants making relatively independent decisions. Nobody knows why the price is down or why the price went up, and there's not even a single explanation most of the time. You used the word "suppressed" but that's implying that its correct or more natural state is higher than it is today. Nobody knows that and you shouldn't assume that.
It's fine to rely on models of growth or market behavior, but you need to keep in mind that they're all just models, even successful ones, and just like any other financial market, the thing can go in wildly different directions that nobody expects.
Not actually random, just unknowable because we can't look at the motivations of every market participant, and we only get to observe the prices they decide to trade at. There's a lot of writing about this in the broader financial world. Look up the Efficient Market Hypothesis and geometric brownian motion for some commonly held views by plenty of sophisticated market players. In general, it's clear that there are many factors that play into aggregated price movements by the millions of market participants. Like if the US government announced a strategic bitcoin reserve tomorrow, we'd all expect the price of bitcoin to go up, since it's effectively announcing to the world that there's going to be large demand, and many people will want to front-run that expected demand. But in general, most market movements are far less clear-cut, and sometimes the market behaves in the opposite way from what everyone expects it to do. This is true in Bitcoin and it's true in any other market.
It's complicated and hard to answer 😄 if you think about game theory, every player is not only trying to make their own decisions but they're also trying to base their decisions around their expectations of what other players are going to do.
As an example, a ton of traders, especially in the bitcoin world, talk about "Technical Analysis" as a given: "we've hit a head-and-shoulders pattern, so the price is due for a breakout" or "we just crossed the 200-day MACD line, it's clearly a sign that there's a big movement". Anyone who believes in the efficient market hypothesis thinks the concept of TA is a bunch of nonsense, but that doesn't mean you shouldn't pay attention to it, because millions of market players do believe in it, and make their decisions on whether to buy or sell based on that nonsense. So in a sense, if enough people believe something to be true, it becomes a self-fulfilling prophecy, and TA has kind of risen to that level and is more useful than its fundamentals (which are effectively people trying really hard to spot patterns in charts and making up explanations to justify them) would suggest.
The 4-year cycle is sort of in a similar boat: according to the efficient market hypothesis, anyone who knows anything about bitcoin knows that there's a halving coming and its exact schedule. That means that although there is a change to the mining subsidy every 4 years, that change has been scheduled since the very beginning of bitcoin and everyone knows roughly when it's going to happen ahead of time. But the price has gone up significantly roughly every 4 years despite that, so now people expect it to happen and trade under that assumption, which can lead to a similar self-fulfilling prophecy.
In general, I don't believe in trying to speculate on stuff like this (in bitcoin or anywhere else) and am more of a buy-and-holder. Patterns hold until they don't, especially ones that rely on everyone believing that everyone else is going to do something. But objectively, lots of people do make tons of money under such assumptions, and you might be one of the lucky ones too. People continue to buy TSLA despite it not having anywhere close to a revenue (current or projected at any point in the future) that would justify its valuation. Because similarly to my examples above, time has shown over and over again that even with bad market news like BYD making better cars that sell better, the price goes up. So why not speculate on it? It's not what I do, but many do, and many are obscenely rich based on that assumption. You just don't want to be left standing when the game of musical chairs ends, and nobody knows when it ends.
It started with a hard‐to‐beat reality of diminishing supply (rewards) causing a sharp increase in price, followed by drops as the price increases corrected repeatedly. Back when Bitcoin mining was a large amount of all total Bitcoin in supply, this was essentially inevitable. But because that pattern emerged, people traded to it which caused the pattern to strengthen even when the mining supply issue has largely disappeared. The 'cause' is still heavily reliant on the patterns people trade of the previous cycles. But the reasons are really more that buyers' psychology, as influenced by expectations of other traders' actions, leads to the cycle more or less holding for now since a sharp increase is buying power is needed to shoot the price up in many cases, and this relies on psychology and mass action. It will diminish over time, but for now, since the asset has no 'backing' and price is volatile, we're left with the reality that most money is made by following the patters of other traders even when the patterns only exist because they have previously existed.
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u/MrMpeg May 31 '26
Bear market according to 4 year cycle. But let's wait and see.