The crypto industry’s long-established four-year market cycle, traditionally driven by Bitcoin halvings, appears to be evolving according to Polygon co-founder Sandeep Nailwal. Speaking on Cointelegraph’s Chain Reaction, Nailwal explained that while crypto markets are currently experiencing suppressed speculative activity due to high U.S. interest rates and low liquidity, the fundamental cyclical patterns have changed. He anticipates that rate cuts and stabilization under the Trump administration will eventually reinvigorate the market.
Nailwal suggests that future market corrections between cycles will be less severe than the 90% drawdowns previously considered normal in crypto. “I feel that those drawdowns will be less pronounced and they will feel a little bit more professional, more mature, especially for the Blue Chip crypto assets,” he stated. This moderation reflects the growing maturity of cryptocurrency as an asset class and increased institutional participation establishing more stable market dynamics.
Several factors are contributing to this shift beyond just market maturation. President Trump’s executive order establishing a Bitcoin strategic reserve, pro-crypto policies attracting institutional investors, and the introduction of cryptocurrency ETFs are all disrupting traditional cycle patterns. ETFs in particular have altered capital flows by sequestering investments in traditional financial products rather than allowing direct ownership of digital assets. Additionally, macroeconomic pressures and geopolitical uncertainties continue to impact market behavior as investors periodically retreat to more stable assets during times of global tension.
