This Top Investment Strategist Thinks a Bitcoin Supercycle Is Coming Soon. Here's Why He's Wrong.

Despite quite a few predictions to the contrary, a Bitcoin (BTC -1.28%) "supercycle" probably isn't coming anytime soon, and past supercycle calls have a poor record.

That hasn't dented the conviction of James Thorne, chief market strategist at Canadian wealth manager Wellington-Altus Private Wealth, who said he expects a run "for the ages" on Oct. 15 in an interview with Bitcoin Magazine.

The last market cycle had Wall Street's money, too

Thorne's argument is that Bitcoin's four-year cycle, a theory that describes its booms and busts as being anchored by its halvings, is no longer relevant. Citing his experience with trading during the commodities supercycle starting in the early 2000s, he claims that the crypto market structure has changed such that this time will be different.

One cause of those changes is the Genius Act, which is the U.S. law regulating stablecoins, and also an increasing trend toward tokenization of assets, which means recording the ownership of assets like Treasury bonds on a blockchain. While the stablecoin regulations could pave the way for more usable capital to live on blockchain rails, asset tokenization could bring more capital tied up in assets from the traditional financial system into crypto as well.

Another element supporting Thorne's argument is that regulators approved spot Bitcoin exchange-traded funds (ETFs) on Jan. 10, 2024, so Wall Street had easy access to the coin throughout the last market cycle. As of Oct. 20, those funds had drawn $57.8 billion in cumulative net inflows.

Thorne is correct to assume that cryptoasset prices are very likely to rise over the long run as a result of these factors.

But the term "supercycle" has no real fixed definition.

It's a term that's hypothesized about pretty much every crypto market cycle. And it's most commonly trotted out during the early innings of a new bull market, which we might be in right now.

For example, in 2021, crypto fund manager Su Zhu predicted that crypto would rise consistently without any new prolonged bear markets, only to later repudiate the thesis in May 2022. The most recent market cycle, centered around the 2024 halving, also saw more than its fair share of supercycle predictions that didn't play out, due in part to the coin breaching its former all-time high in advance of the halving for the first time.

The supercycle debate doesn't change anything

Investors shouldn't buy into the supercycle claims. There will likely always be bear markets for Bitcoin, just as there are for other assets with institutional support.

And even if that wasn't true, the implied best course of action is the same.

Accumulate Bitcoin gradually in small amounts over time. Don't buy so much that you compromise your portfolio's diversification, and don't buy more than you can afford to lose. If there's a bear market, keep buying the same amount (or a hair more) as when there's a bull market underway, and hold for at least five years.

Supercycle or no, the coin's scarcity is only going to increase from here.