TRI Black Friday Sale Is LIVE:
Up to 50% Off

🚨ALERT!🚨 TRI School Prices Increase by $500 in:

00Hours00Minutes

TRI School May Term Starting Soon

0Days00Hours00Minutes

The Best Time For You To Invest in Crypto Based on the 4-Year Bitcoin Halving Cycle

In several previous posts, we’ve looked at broader market cycles and Bitcoin's 4-year cycles. If you haven’t yet seen those, check them out here.

This time, we’ll explore the Bitcoin 4-year cycle and its relationships to broader economic cycles. Understanding these cycles gives you a superhuman investor edge over the public.

Most of Humanity is Asleep to Economic Cycles

Most people are unaware of the reality of economic cycles. Larry Williams, a trading legend and expert in economic cycles, sheds light on the 4-year inflation cycle. Williams, who holds unprecedented trading records, including winning the Robbins World Cup, emphasizes how important understanding these cycles can be.​

Larry Williams’ 4-Year Inflation Cycle

This 4-year inflation cycle chart provides valuable insights into the economic patterns affecting everything, including the market, your stock portfolio, and even your grocery bills.

  • Blue line = Inflation cycle
  • Black line = Actual inflation data

Milton Friedman: The Cause of Inflation

As Nobel prize-winning economist Milton Friedman said, “inflation is created by government” and is “always and everywhere a monetary phenomenon.”

When inflation becomes a problem, central banks tighten the money supply, restricting public access to money. They also increase short-term interest rates to disincentive further borrowing. When inflation is under wraps and economic growth is on the horizon, they lower short-term interest rates and ease restrictions to stimulate growth.

This tightening and loosening monetary policy cycle is foundational to how the Bitcoin cycle works.

Explore the money supply trends on the Federal Reserve's website

The Bitcoin 4-Year Seasonal Cycle is No Coincidence

Satoshi Nakamoto, Bitcoin's creator, introduced the halving to control inflation and ensure Bitcoin remained a deflationary asset. The event occurs every four years, cutting the reward for mining new blocks in half.

The Bitcoin halving mirrors the broader money cycle and reduces the supply of new Bitcoins every four years, creating predictable periods of Bitcoin price increases and market changes.

  • Winter: Bitcoin price bottoms out.
  • Spring: Consolidation and growth phase.
  • Summer: Blow-off top, all-time highs.
  • Fall: Rapid price decline, the hangover.

A Cheat Sheet to Buying Bitcoin

The stock market and economy often move ahead of the business cycles, helping to anticipate future economic conditions. In a previous blog post we talked more about this sector rotation model and how it works. 

Like the business cycle, Bitcoin has seasons, with the market moving ahead of traditional economic cycles. Here’s a small section of TRI’s market cycle cheatsheet, showing how the Bitcoin halving cycle aligns with the public sentiment cycle.

Click here to view the complete market cycles cheatsheet, including ten market cycles, sector rotation, and seasonality.

You Won't Find a Farmer Planting in the Fall

If you’re a farmer, you plant seeds in the spring and harvest in the fall. Bitcoin investing follows a similar seasonal logic. If you understand this cycle, you can plant your investment seeds during the downturns and harvest profits at the peaks.

Most People Will Never Buy Into This

Cognitive dissonance is a powerful behavioral force. Most people are utterly blind to these cyclic patterns staring at them. By learning and accepting these cycles, you can gain an incredible edge over the public. You won’t get sucked into buying at market tops, and instead, wait patiently for the discounts that come during the down cycles.

Recognize the Cycle and Stick to It

Don’t chase after the latest hype coins and assets, especially if their value is skyrocketing or plummeting. Most people mistakenly think, “This time is different,” at the tops and bottoms of markets, but as Mark Twain says, "History doesn't repeat itself, but it often rhymes."

Mastering the concept of cycles can make you feel like a superhuman investor. Understanding the 4-year cycle and seasonal trends allows you to anticipate and capitalize on market movements, avoid buying at peaks, and learn when to capitalize on low entry points.

​If you're new to this topic, I encourage you to read our previous posts for more foundational knowledge.

Previous posts:

Click here to learn more about The Rational Investor Trading Education to learn how to trade and invest like a true professional.

Transform Your Trading In 12 Weeks

Become a Rational Investor with TRI's intense and "hands-on" 12 week interactive program to turn you into a trading professional as quickly as possible. Fundamental Analysis (weeks 1-5) and Technical Analysis (weeks 6-12)

Josh Morris

Lead Blog Writer at The Rational Investor

Josh discovered TRI in 2017 and became a smarter investor by following the teachings from all three levels of the TRI Education program. By 2021, He became the lead blog writer for TRI, sharing updates on the market and lessons learned. He regularly posts insights and trading tips on X @tri_pma helping traders navigate the investing world.

CUSTOM JAVASCRIPT / HTML

Share this blog:

Share this blog:

CUSTOM JAVASCRIPT / HTML

Keep expanding your knowledge

Never miss a post at TRI. Subscribe to the blog below.

CUSTOM JAVASCRIPT / HTML