For over a decade, Bitcoin has followed a “simple script”: every 4 years, the block reward is halved, supply tightens, and the price reaches a new peak.
However, as Bitcoin is currently trading around over 100,000 USD — a fall of nearly 20% from the October peak of over 126,000 USD — the old story of “scarcity leading to price increases” is losing its persuasiveness.
Wintermute, one of the largest market makers in the digital asset space, has stated outright what many have long understood: “The 4-year cycle based on halving is no longer relevant. The determining factor now is liquidity.” Data shows that this assertion is not exaggerated.
Liquidity rewrites the rules of the 4-year cycle
The recent price increase of Bitcoin almost perfectly coincides with the influx of capital into ETF funds. In the week ending October 4th, global crypto ETF funds recorded a record $5.95 billion in new capital, primarily from funds in the US. Just two days later, the daily net inflow reached $1.2 billion — the highest ever.
This wave of “money flood” occurs simultaneously with Bitcoin reaching a new peak around 126,000 USD. As capital flow stagnated at the end of the month, the price also fell back to the 100,000 USD mark at the beginning of November.
This is not a coincidence. In the past, halving was the simplest model to predict the supply – demand of Bitcoin: every 210,000 blocks, the reward for miners falls by half.
After the event in April, the reward is now only 3.125 BTC per block, equivalent to about 450 BTC created each day — worth about 45 million USD at the current price. Although this number seems large, it is still just a small part compared to the billions of USD flowing through ETF funds each day.
An ETF fund can absorb $1.2 billion worth of Bitcoin in a single day — which is 25 times the newly mined supply. Even the average weekly ETF inflows are equivalent to or exceed the total amount of newly created Bitcoin during the same period.
Halving still affects miners' profits, but with market valuation, the limiting factor is no longer the number of new coins mined — but the amount of capital flowing in through managed financial channels.
Stablecoin: the new “base currency” source of the crypto market
The total supply of stablecoins currently ranges from 280 to 308 billion USD, depending on the data source, serving as the “base money” for the entire crypto market.
The increase in the stablecoin supply often accompanies rising asset prices, as they provide immediate liquidity and collateral for leveraged positions. If halving narrows Bitcoin's “supply valve,” stablecoins open the “release door” for demand.
A market driven by cash flow
Kaiko Research's October report vividly illustrates this change. Mid-month, a strong sell-off erased over 500 billion USD from the total crypto market capitalization as order book depth disappeared and open contracts decreased. This is a liquidity shock, not a supply crisis.
The price of Bitcoin is not falling because miners are selling coins or due to the upcoming halving — but because buyers have vanished, derivative positions are being closed, and the market's lack of liquidity is amplifying every sell order.
The world that Wintermute describes is a market where the flow of money — not the block reward — holds the power. The approval of the spot ETF by the US and the expansion of institutional access have restructured the pricing mechanism of Bitcoin.
Large fund flows now dictate the trading rhythm. Prices often rise sharply during the US session — when ETFs are most active. Liquidity in Europe and Asia remains important, but primarily serves as a “bridge” between US sessions.
Short-Term Volatility and Liquidity Cycle
When Bitcoin was still dependent on halving, the price increase cycles often lasted with a slow accumulation phase. In contrast, nowadays the price can fluctuate by thousands of USD in just one day, depending on the direction of ETF capital flow.
Futures funding and open contract data show that leverage remains a strong amplifying factor. When the funding rate remains high, the market is susceptible to significant corrections if ETF capital flows reverse.
The drop in October — accompanied by rising borrowing costs and capital outflows from ETFs — is the clearest example of how fragile the market structure is when liquidity dries up.
However, the underlying liquidity continues to expand. The FCA in the UK allowing retail investors to access crypto ETNs has spurred a fee race among issuers, leading to increased trading volume on the London Stock Exchange.
Each such channel is a new “pipeline” leading capital into Bitcoin, further tying this asset to the global liquidity cycle and gradually separating it from the previous closed halving cycle.
Bitcoin has become a liquidity-sensitive asset
The Bitcoin market now operates similarly to other major assets: its performance depends on monetary conditions. While in the past the “halving schedule” guided investor sentiment, today it is the Federal Reserve, ETF tables, and stablecoin issuers that regulate the rhythm.
In the coming months, the direction of Bitcoin will depend on liquidity fluctuations:
- Basic scenario: Bitcoin fluctuates in the range of 95,000 – 130,000 USD, as the ETF capital flow remains slightly positive and the supply of stablecoin increases steadily.
- Bullish scenario: If the ETF records a new record capital inflow week or additional products are approved, the price could head back to the 140,000 USD mark.
- Falling scenario: If there is a “liquidity crunch” with many days of ETF capital withdrawals and stablecoin contraction, Bitcoin could fall to the 90,000 USD range.
None of these scenarios depend on how many coins are mined or when the next halving occurs — but are entirely dependent on the flow of capital in and out of the system.
From “halving cycle” to “cash flow cycle”
Data from Kaiko also shows that ETFs are changing the structure of the spot market, with a narrower price spread (spread) and thicker liquidity during US trading hours, but thinner outside of hours.
Now, the health of the Bitcoin market can be assessed through the activity of creating and withdrawing ETF certificates, rather than just looking at on-chain data. When the entire amount of coins mined each day is absorbed in just a few minutes, the balance of power is clear.
Bitcoin has become a “liquidity-sensitive asset” — which may disappoint those who once believed in the “halving miracle.” But with an asset that has been institutionalized, linked in ETFs, and pegged to stablecoins, that is indeed a sign of maturity.
The halving cycle is not “dead” — it has just been downgraded.
If a decade ago investors were taught to watch the “halving clock”, then the next decade will teach them to observe the flow of money.
The new calendar of Bitcoin is no longer measured by 4 years — but is measured by each billion USD flowing in or out of ETFs, the amount of stablecoin issued or redeemed, and the capital flow moving in a market that has far surpassed the legend of its own origin.
Miners still keep the beat, but this rhythm belongs to money.
Doanh Chính
