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CoinTelegraph 2025-03-28 21:15:15

Crypto market cycle permanently shifted — Polygon founder

The four-year crypto market cycle that traders and investors have become accustomed to is no longer as pronounced due to the maturation of crypto as an asset class and the participation of institutional investors, according to Polygon co-founder Sandeep Nailwal. During a recent episode of Cointelegraph's Chain Reaction, Nailwal said that Overall speculative activity is down due to high interest rates in the United States and low-liquidity conditions, but will rebound once rates are cut and the Trump administration settles into its new role. Although interest rates on 10-year Treasury bonds have come down significantly, rates still remain relatively high. Source: TradingView Nailwal added that while he expects 30-40% drawdowns between cycles and still expects the Bitcoin ( BTC ) halving to have some effect on markets, the four-year cycle is now less pronounced . Nailwal said: "We have generally seen 90% drawdowns between cycles, which is very 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." The Polygon founder concluded that once the uptrend resumes and crypto markets experience a prolonged bull run then capital will rotate from larger cap assets into smaller cap assets. Related: BTC dominance steadily rising since 2023, is altseason now a relic? Other disruptors of the four-year cycle US President Donald Trump’s executive order establishing a Bitcoin strategic reserve is one of the factors market analysts say is distorting the four-year market cycle. Pro-crypto policies from the Trump administration have also legitimized crypto in the eyes of institutional investors, which should bring in new capital flows and reduce the volatility of digital assets. Flows into crypto ETFs for the week of March 21. Source: CoinShares The advent of exchange-traded funds (ETFs) has also disrupted the four-year cycle by propping up the prices of digital assets that have ETFs and sequestered capital in those investment vehicles. Because ETFs are traditional finance products that do not give the holder the underlying digital assets, these investment vehicles prevent capital from freely rotating into other assets. Macroeconomic pressure and geopolitical uncertainty also have a disruptive effect on market cycles, as investors flee risk-on assets for more stable alternatives such as cash and government securities. Magazine: Bitcoin will ‘start ripping’ as Trump’s polls improve: Felix Hartmann, X Hall of Flame

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