For over a decade, crypto investors operated on a simple premise: Bitcoin’s price moves in a predictable four-year cycle, dictated by the halving. But that long-held pattern appears to be broken. Despite record inflows into spot Exchange-Traded Funds (ETFs) and major corporate treasury acquisitions, Bitcoin’s price action no longer follows the old script.

According to on-chain analyst James Check, co-founder of Checkonchain Analytics, the market has fundamentally shifted. He argues that global liquidity, institutional investment, and a booming derivatives market are the new primary drivers, eclipsing the supply reduction from the halving. “Bitcoin is now responding to the world, not the other way around,” Check stated, emphasizing that the crypto cycle has given way to a new liquidity regime.

The ETF Effect: A Flood of Demand Meets Strong Headwinds

The launch of spot Bitcoin ETFs created a surge of institutional interest. CoinShares recorded billions in crypto ETF inflows, with Bitcoin products capturing the lion’s share. However, Check suggests that much of this isn’t entirely new money entering the market. Instead, it represents a rotation from older, less efficient products like the Grayscale Bitcoin Trust (GBTC) into modern ETFs.

While total ETF inflows have reached around $60 billion, the market has remained consolidated. This is because the demand is being met by immense selling pressure from existing investors, who are realizing profits at a rate of $30 billion to $100 billion per month. “The demand is huge, but the sell side is also incredibly strong,” Check explained, highlighting how profit-taking from long-term holders is capping price growth.

Rethinking On-Chain Data in the ETF Era

In the past, analysts often looked at Bitcoin flows to exchanges as a key market signal, with declining balances suggesting supply scarcity. Check now believes this data is less reliable. “I rarely use exchange data because the coverage is incomplete,” he said, pointing to the difficulty of accurately tracking assets across countless wallet addresses.

He suggests a better metric is the supply held by long-term holders (LTH), which currently stands at 15.68 million BTC—roughly 78.5% of the circulating supply. This figure, which reflects the holdings of investors with long-term conviction, is a more accurate indicator of true scarcity than fluctuating exchange balances.

Miners’ Influence Fades into the Background

Mining activity, once considered a primary source of selling pressure, now plays a much smaller role. With only 450 BTC issued daily, miners’ impact pales in comparison to the 10,000 to 40,000 BTC sold or moved by existing investors during bull markets. “Halving has been unimportant, even irrelevant for the last few cycles,” Check asserted. The market is now far more sensitive to institutional flows than the daily supply from miners, rendering the old halving narrative obsolete.

From Cycles to Liquidity Regimes

Checkonchain’s analysis identifies two major turning points in Bitcoin’s history: the 2017 price peak and the 2022-2023 transition. During this latter period, Bitcoin matured and began to be treated more like a global macro asset. Its volatility is decreasing, while its correlation with assets like gold and stocks is growing, signaling its integration into the global financial system.

Instead of the halving, Check advises monitoring the institutional cost basis and market liquidity. Data suggests the $75,000 to $80,000 range is forming a strong potential support zone. He notes that older metrics like the overall Realized Price, which includes long-lost coins, are no longer as relevant in this modern era.

Derivatives Emerge as the New Center of Gravity

Beyond ETFs, the derivatives market has become a key price driver. Financial products like options and futures contracts built on top of spot ETFs are creating powerful new layers of liquidity. The success of BlackRock’s IBIT ETF, which commands a dominant market share, was amplified significantly after options trading on the product became available.

The U.S. now stands as the global hub for crypto ETFs, absorbing nearly all new institutional capital. “The most important thing is not the ETF itself, but the ecosystem of options and derivatives on top of it,” Check said. This confirms that the market is now steered by sophisticated financial instruments, not just the retail adoption that defined previous cycles.

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