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Mention crypto, or Bitcoin specifically, and most people’s minds go straight to eye-watering drawdowns and wild volatility. Or the response is simpler than that: “I don’t know how to buy it, it seems too complex, so I just avoid it altogether.” In reality, it’s extremely simple.
Yesterday we covered the bear market mirror of ‘22, and the bull market of ‘23-’25 that followed it. That’s one turn of the wheel. Zoom out, and you’ll see we’ve been turning that same wheel since 2014.
If you’ve invested in Bitcoin for any length of time, you’ve heard of the four-year cycle. It’s been the case for Bitcoin’s entire life. The halving cuts new supply in half, a bear market grinds out the excess leverage and weak hands, a pre-bull accumulation phase quietly rebuilds the base, then a bull run takes prices to new highs. Round and round it goes, and so far, it hasn’t missed.
Looking at the chart above, the pattern is almost embarrassingly consistent across every cycle since 2014. Bear, pre-bull, first bull, second bull, repeat. Each bear phase has looked similarly brutal in the moment (2014, 2018 and 2022 all carved out drawdowns of 70-85% from the prior high), and each one has been followed by a recovery that made the drawdown look, in hindsight, like the best entry point of the cycle. We’re living through the 2026 version of that same bear leg right now, and based on where we sit in the pattern, we’re closing in on the end of it. If history holds, this is exactly the point in the cycle where allocating gets rewarded.
So it sounds simple. Mirror the pattern, buy the bear market, hold through to the bull. The cycle keeps disproving its doubters and keeps holding up cycle after cycle. In theory, it really is that easy.
But theory and practice are two very different things.
In practice, this is one of the hardest trades an investor will ever make. It’s easy to look at a chart with the benefit of hindsight and say “buy here.” It’s an entirely different thing to buy when Bitcoin is down 50%+ from its highs, your portfolio is red across the board, and every headline is telling you it’s over this time. This cycle has been no exception: outlets have spent the past month debating whether the ETF era has broken the pattern for good, whether institutional selling means “this time is different.”
That’s the trap. Every cycle has had its own version of “this time is different.” In 2018 it was the ICO bust and exchange collapses. In 2022 it was Terra and FTX. This time it’s ETF outflows and a hawkish Fed. The specific story changes, but the emotional experience of living through it doesn’t. Drawdowns feel existential in real time and look obvious in hindsight, and that gap between how it feels and how it looks later is precisely what makes the trade so hard to execute.
Emotion takes over exactly when discipline matters most. Naysayers get loudest right at the point of maximum opportunity, and stubbornness from the doubters floods the narrative just as conviction is hardest to hold onto. The real challenge was never identifying the pattern. The chart makes that part easy, and it always has. The real challenge is pulling the trigger when every instinct is telling you not to.
The takeaway. The four-year cycle isn’t complicated. What’s complicated is having the discipline to act on it when it counts, in the middle of the drawdown, not after the fact once the discomfort has already passed and the chart has already turned. That discipline, not the pattern itself, is what separates the investors who talk about the cycle from the ones who actually profit from it.
Stormrake Spotlight: Pax Gold (PAXG) ($4,115)
Stormrake Spotlight: Pax Gold (PAXG) ($4,115)
