The Bitcoin reserve bill is considered to potentially break the four-year cycle of Bitcoin?

The price cycles of Bitcoin (BTC) often revolve around its block reward halving mechanism, which occurs approximately every four years, significantly reducing the new supply of Bitcoin in the market and triggering a series of market effects:

1. Halving affects the supply-demand relationship

• After halving, miners' Bitcoin income decreases, reducing market supply pressure.

• Due to supply not meeting demand, the market easily pushes prices up.

2. Cyclical Phenomena

• Halving → Bull Market: The reduction in new Bitcoin drives prices up, stimulating market enthusiasm and triggering a bull market.

• Bull Market → Crash: Price increases attract a large number of speculators, the market bubble begins to expand, and subsequently crashes into a bear market.

• Bear Market → Consolidation: Market sentiment cools, speculative funds exit, prices stabilize, waiting for the next halving.

The core logic of the four-year cycle is that Bitcoin's new supply is stable, transparent, and predictable, with the market forming speculative and investment behaviors around this principle.

Bitcoin reserve bills refer to a policy where a country treats Bitcoin as a strategic reserve asset or currency tool. Once this initiative becomes widespread, it will have a disruptive impact on Bitcoin's demand and market dynamics.

1. Increased national-level long-term demand disrupts the four-year supply-demand rhythm

• Supply becomes scarce: National behaviors represent a long-term, large-scale, and unpredictable demand action. When national reserve demand increases, the balance of supply and demand is disrupted, leading to earlier and more severe manifestations of supply scarcity.

• Squeezing market liquidity: Significant government reserves will reduce the amount of Bitcoin in circulation, causing price fluctuations to deviate from the original four-year cycle logic.

2. Bitcoin's macro-financial attributes are enhanced

• As nations and institutions view Bitcoin as a reserve asset, the investment logic for BTC gradually shifts from 'speculation' to 'reserve' and 'hedging' tools.

• The financial attributes of Bitcoin begin to merge with traditional assets (such as gold and government bonds), becoming more influenced by macroeconomic events rather than solely relying on halving mechanisms to trigger cyclical price changes.

3. Increased market stability, reduced bubbles

• If Bitcoin becomes a reserve asset, national purchasing and reserve behaviors will be long-term and planned, which can mitigate severe price fluctuations (bubbles or crashes).

• This will gradually stabilize Bitcoin's trajectory, making it more like gold in terms of steady appreciation in the long term, rather than an extremely cyclical speculative tool.

4. Multiple countries globally may follow suit, potentially sparking a buying frenzy

• Reserve bills may start from individual countries, but as prices rise and reserve competition effects emerge, more countries may join. For example, El Salvador's early adoption of Bitcoin reserves may encourage more countries to follow suit, resulting in 'national-level FOMO (fear of missing out)'.

The current cycle relies on the amount of Bitcoin issued by miners and market liquidity, but if a reserve bill emerges, the supply-demand dynamics of Bitcoin will undergo the following changes:

1. The four-year cycle is broken by 'additional demand'

• The four-year cycle is based on supply-side changes (halving), while the demand changes brought about by reserve bills are additional, which may initiate a bull market earlier or even break the continuation of a bear market.

• When nations scramble for reserves, it is unnecessary to wait for halvings to trigger supply shortages directly, and prices may no longer follow the pattern of soaring a year after halving.

2. Cycle timeline lengthens or even becomes ambiguous

• As national reserves and institutional holdings increase, market maturity will improve, and prices may not experience the large ups and downs seen in the past, but instead show a longer period of slow growth, ultimately diminishing the four-year cycle effect.

3. Market drivers shift from 'halving' to 'national behavior'

• If the reserve bill becomes mainstream, market focus will shift from attention on block reward halvings to studying the purchasing behaviors of nations and institutions. For example, potential policy impacts from the Federal Reserve and the International Monetary Fund may become focal points for the market.

1. A super bull market in the short term

• When nations or large institutions purchase Bitcoin, it may trigger a surge in demand, directly igniting a super bull market. Market sentiment, which used to be regular like the four-year cycle, will be replaced by buying behaviors.

2. Long-term steady value storage logic

• As more countries build reserves, Bitcoin's price volatility gradually decreases, and the investment logic shifts from 'short-term speculation' to 'long-term stable asset'. Similar to gold, Bitcoin may transition from a volatile asset to a 'digital value storage tool'.

3. A new round of 'global monetary revolution'

• Once reserve bills become widespread, more countries will participate in the reserve competition, reshaping the global financial landscape, and Bitcoin could become a decentralized 'global reserve currency'.

Although the potential of reserve bills is immense, the following situations may hinder the complete disruption of the four-year cycle:

1. The pace of globalization is slow: reserve bills may only be implemented in small-scale countries and fail to significantly alter the overall market supply and demand.

2. Speculative sentiment remains strong: Retail and small to medium investors continue to operate around halvings and bull-bear cycles, resulting in periodic fluctuations still being evident.

3. Policy resistance: Some major countries may introduce policies to suppress Bitcoin, hedging against its potential to become a global reserve currency.

Bitcoin reserve bills have the potential to fundamentally change the supply-demand relationship and driving forces in the Bitcoin market, making the originally clear four-year cycle more ambiguous or even breaking it. In the long term, this bill will promote Bitcoin's transition from a 'cyclical speculative asset' to a 'global value storage asset'. If you believe in the potential of the reserve bill, early positioning will undoubtedly be an excellent opportunity.