Bitcoin changes the game: new five-year cycle theory versus traditional bank warnings

The world of Bitcoin stands at a crossroads. On one side, Grayscale, one of the largest digital asset managers, advocates for a radical shift: replacing the four-year cycle of rises and falls with a new theory, suggesting that the market enters a five-year cycle, leading to another all-time high in 2026. On the other side, traditional financial giants issue warning signals, seeing an emerging bubble.

Why does this debate matter? Bitcoin is currently hovering around $90.80K, $35.28K below the historical peak of $126.08K. Every forecast regarding the price direction has implications for investors worldwide.

What is the new cycle theory and what is it based on?

Grayscale analysts argue that the fundamental market environment has changed. The massive influx of institutional capital through Spot Bitcoin ETFs and increasing corporate adoption are seen as factors transforming price dynamics. According to their theory, the inflow of capitalized money creates a foundation for more predictable growth instead of the wild, speculative jumps seen in previous cycles.

Here is the key distinction in Grayscale’s theory:

• Previous model: Retail speculative behavior → extreme volatility → parabolic rally → sharp crash
• New model: Organized institutional inflow → gradual, structured growth → more sustainable trend → potentially higher peak

This theory suggests that Bitcoin halving (reducing block rewards) no longer acts as a mechanical trigger for a bull run. Instead, ETF inflow volume becomes a new indicator of sentiment and buying pressure.

Why do traditional banks remain skeptical?

Barclays questions the optimistic narrative. The British bank warns of a bearish scenario exactly in 2026, signaling that the current bullish momentum may be temporary. Their theory is based on different observations:

They have noticed a significant decline in spot transaction volumes and a weakening investor appetite for large allocations. To them, these are classic warning signs of a downturn.

The collision of these two perspectives reflects a lack of consensus on whether Bitcoin has fundamentally changed or is simply repeating old behaviors in a new guise.

How should investors respond to conflicting signals?

A practical approach requires balancing optimism and caution:

1. Don’t put all your eggs in one basket: Whether it’s a bull or bear market, diversify your investments over time through systematic buying.

2. Monitor on-chain metrics: Data on ETF inflows/outflows, active addresses, and whale transfers provide a clearer picture than price alone.

3. Manage your exposure: The path to a new peak may be longer than expected or may not materialize at all. Never invest more than you can afford to lose.

4. Watch the halving: Despite Grayscale’s theory, the halving scheduled for 2024/2025 will remain a key market milestone.

Is the new cycle theory reality or speculation?

The dispute between Grayscale and Barclays illustrates a maturing market. Once, Bitcoin was discussed only within narrow circles of speculators. Today, major financial institutions publicly analyze its trajectory. This is a testament to the integration of cryptocurrencies into the mainstream.

Will the five-year cycle theory prove correct? History suggests markets rarely move exactly as forecasted. Bitcoin at $90.80K is still far from its all-time high, giving investors plenty of time to adapt to the changing reality.

Questions worth asking oneself:

What is Grayscale’s main argument?
Institutional ETF inflows are transforming Bitcoin’s cycle character, replacing speculative chaos with more regular growth.

Why does Barclays warn?
Lower spot volumes and waning demand suggest the bullish momentum could exhaust itself before 2026.

Should I wait until 2026 to get involved in Bitcoin?
No. Regardless of when the peak occurs, continuous small investments reduce the risk of poor timing.

What does the halving mean in this new theory?
Halving remains important, but its impact may be stretched out and softened by institutional inflows rather than being a sharp supply shock.

Which metric is most important now?
Inflows into Spot Bitcoin ETF. It’s a new sentiment barometer for institutions and the market’s capacity to sustain growth.

Both Grayscale and Barclays have arguments based on observations. How this will all end — the new Grayscale theory or Barclays’ warnings — remains open. Bitcoin at $90.80K is far from the record, but its position in the mainstream financial landscape is already unchangeable.