Bitcoin is trading more like an ‘amplified version of gold’ again, but the four-year cycle theory threatens further declines

Bitcoin has reached a multi-month high this week as investors have treated it more like a safe haven compared to earlier in the year when it traded more like a risk-on asset. The cryptocurrency recently broke out of a $60,000 to $70,000 range and hit a four-month high of $82,262 before retracing some gains. At its current price of around $79,800, Bitcoin is near its highest level since May.

Bitwise's Andre Dragosch noted that the recent upswing is due to investors viewing Bitcoin as a store of value rather than a risky tech stock. This shift in perception comes as Treasury Secretary Scott Bessent proposed increasing the Treasury's buybacks of long-dated bonds, which raised concerns about financial repression and elevated 30-year yields to their highest level in nearly two decades.

Bitcoin's correlation with gold has neared a six-year high as investors become more risk-averse, making it seem more like an amplified version of gold. However, this correlation could be a temporary phenomenon, as the last time Bitcoin and the dollar were this closely correlated was in 2020 during the COVID-19 pandemic. Some traders also believe the four-year cycle theory could lead to a bear market bottom sometime in November 2026, four years after the last bear market bottom in November 2022.

While this theory may not necessarily predict a downslide later this year, having a long-term perspective is generally considered the most beneficial for investors.