The traditional four-year crypto market cycle, once closely tied to Bitcoin halving events, is no longer as predictable as it once was.

According to Sandeep Nailwal, co-founder of Polygon, the cycle has shifted due to the growing maturity of the cryptocurrency market and the increasing involvement of institutional investors.

The traditional four-year crypto market cycle, once closely tied to Bitcoin halving events, is no longer as predictable as it once was, according to Sandeep Nailwal, co-founder of Polygon.

In a recent interview with BlockTV, Nailwal explained that the cycle has shifted due to the growing maturity of the cryptocurrency market and the increasing involvement of institutional investors.

While Bitcoin's halvings still influence the market, their effect has become less pronounced, and speculative activity has slowed due to high interest rates and low liquidity conditions, he added.

Once those factors change, a market rebound could occur, but Nailwal expects the market to behave in a more stable manner, with corrections being less severe.

Instead of the 90% drops typical of previous cycles, he predicts that drawdowns will be around 30-40%.

"I think in the next bull market, we might see smaller corrections, probably in the 30-40% range, which is still significant, but not as extreme as the 90% corrections we saw in the previous market."

Those corrections in the past followed predictable patterns, but the current cycle is evolving due to factors like institutional adoption and macroeconomic pressures.

The increase in institutional investment has helped reduce volatility in the crypto market, aided additionally by new financial products like Bitcoin ETFs.

These ETFs, which allow investors to gain exposure to Bitcoin without actually holding the cryptocurrency, have also played a part in disrupting the traditional market cycle.

By restricting the flow of capital to the underlying assets, these products prevent funds from rotating freely within the broader crypto ecosystem.

This has altered the usual dynamics, with larger-cap assets like Bitcoin and Ethereum absorbing most of the capital, leaving smaller-cap assets with less attention.

Geopolitical events and macroeconomic factors have also contributed to the shifting landscape of the crypto market.

U.S. government policies, including President Trump’s executive order to create a Bitcoin strategic reserve, have legitimized the crypto space in the eyes of institutional investors.

As a result, capital has flowed into established assets, contributing to a concentration of wealth in Bitcoin and Ethereum.

Analysts have noted that Bitcoin's dominance has risen, now nearing 54%, a level not seen since 2021.

While the Bitcoin halving remains a significant event, its influence on the market has become less mechanical.

Some analysts, such as Miles Deutscher, argue that the classic four-year cycle still has relevance, though it may no longer follow the same pattern.

“While the market is less volatile, the typical sequence of accumulation, rise, distribution, and fall is becoming less predictable,” Deutscher wrote in a recent analysis.

He added that market behavior is becoming more desynchronized, with Bitcoin and Ethereum leading the charge before altcoins see any significant gains.

This shift, combined with the broader economic environment, suggests that the crypto market is entering a new phase where older cycles may no longer be as reliable a guide for investors.