Crypto investment firm 21Shares conceded on Wednesday that Bitcoin has not broken its four-year cycle, as the cryptocurrency trades below $60,000 for the second time this month. The firm previously predicted Bitcoin would break from its historical four-year trading pattern in 2026. The acknowledgment comes as Bitcoin fell 52% from its all-time high of $126,080, recently changing hands at $59,781 on Wednesday, though the current drawdown remains milder than the 80%+ declines seen in prior bear market cycles.
21Shares Acknowledges Four-Year Cycle Persists Despite Market Structure Changes
21Shares wrote in its latest "State of the Market" report that "heading into 2026, we believed that Bitcoin's four-year cycle could be finished." The firm added, "Six months in, we have to be honest: price action still looks familiar."
The four-year cycle is a historical trading pattern that has seen BTC peak and then bottom following the quadrennial halving of its mining reward. While acknowledging the cycle persists, 21Shares noted that "market structure has clearly changed: ETF ownership is increasingly institutional and the current drawdown of roughly 50% remains far milder than the 80%+ bear markets of prior cycles."
According to data from Glassnode, Bitcoin is holding above its on-chain cost basis of $54,000, signaling that the market has not yielded to "outright capitulation."
Crypto ETF Assets Decline Nearly $5 Billion Since Start of Year
Bitcoin ETFs have not seen the influx in investment that 21Shares expected this year. The firm anticipated crypto ETFs would jump towards $400 billion in assets under management during this year. However, more assets have actually left crypto ETFs than have entered this year, catalyzing the fall from all-time high marks for both Bitcoin and Ethereum.
Data from CoinGlass indicates that nearly $3 billion in assets have left crypto ETFs during the last quarter, and crypto ETFs as a whole are down nearly $5 billion since the start of the year.
Stablecoin and DeFi Metrics Fall Short of Firm Forecasts
Other breakouts predicted by the firm have also fallen short. 21Shares had forecast a jump to a $1 trillion stablecoin market cap, $300 billion in DeFi total value locked (TVL), and $250 billion in assets under management for crypto treasury firms (DATs). The firm attributed the underperformance to lingering regulatory uncertainty, consistent DeFi exploits, and declining crypto prices.
Prediction Market Volumes Reach $57.5 Billion by End of May
One prediction that remains on pace is the firm's optimism around prediction market trading volumes, which it anticipated would breach $100 billion this year. Led by Polymarket and Kalshi, data gathered by the firm indicates prediction market platforms had done more than $57.5 billion in volume by the end of May, well ahead of the pace needed to eclipse the number.
FAQ
What did 21Shares say about Bitcoin's four-year cycle on Wednesday?
21Shares conceded on Wednesday that Bitcoin has not broken its four-year cycle, stating "six months in, we have to be honest: price action still looks familiar," despite previously predicting the cycle would break in 2026.
How much have crypto ETF assets declined since the start of the year?
Crypto ETFs as a whole are down nearly $5 billion since the start of the year, with nearly $3 billion in assets leaving crypto ETFs during the last quarter, according to data from CoinGlass.
What is Bitcoin's current drawdown compared to prior bear markets?
Bitcoin has fallen 52% from its all-time high of $126,080, trading at $59,781 on Wednesday. 21Shares noted this current drawdown of roughly 50% remains far milder than the 80%+ bear markets of prior cycles.
