Market Insider – The price of Bitcoin (BTC) has been undergoing sharp, continuous declines, raising investor concerns over the potential end of its latest bull cycle. On the morning of October 23, Bitcoin unexpectedly slipped to just over $106,000 per BTC, causing its total market capitalization to drop to $2.166 trillion.
Fed Governor Signals a Regulatory Evolution
The market volatility comes alongside a notable change in how U.S. financial regulators perceive digital assets. Federal Reserve Governor Christopher Waller recently stated that cryptocurrency has become a legitimate component of both the payment and financial systems.
Waller’s statement marks a significant pivot from the historically cautious stance maintained by U.S. regulators. Previously, the Fed often approached crypto with skepticism, citing concerns over extreme volatility, illicit finance risks, and consumer protection. His comments now suggest the central bank is increasingly acknowledging the substantial role the digital asset sector has assumed. This shift in regulatory perspective reflects the growing integration of crypto into the traditional financial structure, evidenced by major financial institutions beginning to offer custody, trading, and investment services for digital assets.
Cycle Fears and Global Uncertainty Drive Sell-Off
The broader crypto market has been deeply in the red, with most major coins experiencing steep declines. Analysts attribute part of this downward pressure to retail investors adhering to Bitcoin’s traditional “four-year cycle” rule.
The sharp selling began after a period of global trade instability, specifically following threats by U.S. President Donald Trump to impose additional tariffs on China. This geopolitical uncertainty triggered a record-breaking wave of liquidations across the crypto market, estimated at approximately $19 billion in a single day.
Historically, Bitcoin’s price movements have been tied to its four-year cycle, which is anchored around the halving event where miner rewards are cut in half. Each cycle typically features a peak after the halving is completed, followed by a decline in subsequent years. With Bitcoin reaching an all-time high of $125,000 in October, many investors believe the current cycle is nearing its conclusion.
Matthew Nay, an analyst at Messari, noted in a report that “This sell-off is partly driven by a group of traders still buying into the four-year model. It’s been nearly four years since the peak of the last cycle, and amidst global trade uncertainty, they’re inclined to take profits to protect their position.” Similarly, Jonathan Morgan of Stocktwits suggested the decline could be a result of automated trading where investors rely entirely on the cycle model.
However, not all experts agree. Jasper De Maere, a strategist at Wintermute, argues that this cyclical strategy is becoming obsolete. He contends that the halving’s influence is diminishing because the reduced miner reward is now too small to significantly impact the massive global trading volume, suggesting that macroeconomic and geopolitical factors may be superseding the historical four-year pattern.
