The four-year crypto market cycle that traders and investors have become accustomed to is no longer as pronounced due to the maturation of crypto as an asset class and the participation of institutional investors, according to Polygon co-founder Sandeep Nailwal.

During a recent episode of Cointelegraph’s Chain Reaction, Nailwal said that Overall speculative activity is down due to high interest rates in the United States and low-liquidity conditions, but will rebound once rates are cut and the Trump administration settles into its new role.

Although interest rates on 10-year Treasury bonds have come down significantly, rates still remain relatively high. Source: TradingView

Nailwal added that while he expects 30-40% drawdowns between cycles and still expects the Bitcoin (BTC) halving to have some effect on markets, the four-year cycle is now less pronounced. Nailwal said:

“We have generally seen 90% drawdowns between cycles, which is very normal in crypto. I feel that those drawdowns will be less pronounced and they will feel a little bit more professional, more mature, especially for the Blue Chip crypto assets.”

The Polygon founder concluded that once the uptrend resumes and crypto markets experience a prolonged bull run then capital will rotate from larger cap assets into smaller cap assets.

Related: BTC dominance steadily rising since 2023, is altseason now a relic?

Other disruptors of the four-year cycle

US President Donald Trump’s executive order establishing a Bitcoin strategic reserve is one of the factors market analysts say is distorting the four-year market cycle.

Pro-crypto policies from the Trump administration have also legitimized crypto in the eyes of institutional investors, which should bring in new capital flows and reduce the volatility of digital assets.

Flows into crypto ETFs for the week of March 21. Source: CoinShares

The advent of exchange-traded funds (ETFs) has also disrupted the four-year cycle by propping up the prices of digital assets that have ETFs and sequestered capital in those investment vehicles.

Because ETFs are traditional finance products that do not give the holder the underlying digital assets, these investment vehicles prevent capital from freely rotating into other assets.

Macroeconomic pressure and geopolitical uncertainty also have a disruptive effect on market cycles, as investors flee risk-on assets for more stable alternatives such as cash and government securities.

Magazine: Bitcoin will ‘start ripping’ as Trump’s polls improve: Felix Hartmann, X Hall of Flame

It has been a wild few years for GameStop, the video game retailer turned memecoin stock. After being pulled from the edge of bankruptcy in 2021 thanks to a surging stock price, the company has made sensible business decisions over the years, such as shrinking its physical footprint and focusing on higher-margin items. 

Now, GameStop is trying to secure its survival by investing in Bitcoin (BTC). This approach seems to have worked for Strategy, Michael Saylor’s business intelligence firm turned Bitcoin bank. Strategy has now amassed more than 500,000 BTC through successive purchases. And despite experiencing massive volatility, Strategy’s stock has rallied more than 2,100% since acquiring its first Bitcoin back in 2020.

GameStop has memed its way back to relevance — who says it can’t secure at least the next decade of its existence by riding the Bitcoin wave?

This week’s Crypto Biz newsletter chronicles GameStop’s Bitcoin gambit, the adoption magnet that is tokenization and the recovery in Bitcoin mining revenues.

GameStop: Following the Strategy playbook

On March 25, GameStop confirmed that it had received board approval to invest in Bitcoin and US-dollar-pegged stablecoins. There’s reason to believe that the video game retailer could make a big splash, given its corporate cash balance of nearly $4.8 billion. This is a notable jump from one year earlier when the company’s balance sheet was around $922 million. 

There’s also reason to believe that GameStop CEO Ryan Cohen was orange-pilled by Michael Saylor after the two met in early February. Cohen confirmed that the meeting took place by posting an uncaptioned photo of him and Saylor on Feb. 8. 

Source: Ryan Cohen

For his part, Saylor continues to accumulate as much BTC as humanly possible. Earlier in the week, he announced that Strategy had acquired another 6,911 BTC, bringing its stockpile to 506,137 BTC.

Tokenized real estate comes to Polyon

DigiShares has launched a real estate trading platform on Polygon, giving investors access to a liquid on- and off-ramp for commercial and residential properties. 

RealEstate.Exchange, also known as REX, launched with two luxury property listings in Miami, Florida, including a 520-unit tower and a 38-unit residential complex.

A Google street view of one of the property listings, The Legacy Hotel & Residences in Miami, Florida. Source: Google Maps

DigiShares CEO Claus Skaaning told Cointelegraph that REX has an additional five or six properties in the pipeline, adding that REX will eventually support all sorts of commercial and residential properties. 

REX operates in the United States through a license with Texture Capital, a broker-dealer registered with the Securities and Exchange Commission. The platform is also seeking registrations in the European Union, South Africa and the United Arab Emirates. 

Tokenized assets coming to CME

CME Group, one of the world’s largest derivatives exchange operators, has tapped Google Cloud to roll out its asset tokenization program. 

Specifically, CME Group is using the Google Cloud Universal Ledger (GCUL) to tokenize traditional assets on the blockchain — a move the company said would improve capital market efficiency and wholesale payments. 

Tokenization could “deliver significant efficiencies for collateral, margin, settlement and fee payments as the world moves toward 24/7 trading,” said Terry Duffy, CME Group’s Chairman and CEO.

Although CME didn’t provide specific details about which assets would be part of the tokenization pilot, it plans to begin testing the technology with market participants next year.

Bitcoin miner revenues stabilize post-halving

Bitcoin miners are on track for recovery following the network’s April 2024 halving event, which reduced mining revenues from 6.25 BTC to 3.125 BTC.

According to data from Coin Metrics, miner revenues are approaching $3.6 billion in the first quarter, which isn’t far off from the prior quarter’s $ 3.7 billion tally. It marks a major rebound from the third quarter of 2024 when revenues plunged to $2.6 billion. 

Miners have quickly adapted to the latest quadrennial halving, though revenues remain lower than the pre-halving peak in the first quarter of 2024. Source: Coin Metrics

“With almost one year elapsed since Bitcoin’s 4th halving, miners have endured a period of stabilization, adapting to reduced block rewards, tighter margins, and shifting operational dynamics,” Coin Metrics said.

Despite adverse market conditions since the halving, some miners are doubling down on their Bitcoin hodl strategy. Hive Digital’s chief financial officer told Cointelegraph that the company is focused on “retaining a significant portion of its mined Bitcoin to benefit from potential price appreciation.”

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The Federal Deposit Insurance Corporation (FDIC) said in a March 28 letter that institutions under its oversight, including banks, can now engage in crypto-related activities without prior approval. The announcement comes as the Commodity Futures Trading Commission (CFTC) announced that digital asset derivatives wouldn’t be treated differently than any other derivatives.

The FDIC letter rescinds a previous instruction under former US President Joe Biden’s administration that required institutions to notify the agency before engaging in crypto-related activities. According to the FDIC’s definition:

”Crypto-related activities include, but are not limited to, acting as crypto-asset custodians; maintaining stablecoin reserves; issuing crypto and other digital assets; acting as market makers or exchange or redemption agents; participating in blockchain- and distributed ledger-based settlement or payment systems, including performing node functions; as well as related activities such as finder activities and lending.”

FDIC-supervised institutions should consider associated risks when engaging in crypto-related activities, it said. These risks include market and liquidity risks, operational and cybersecurity risks, consumer protection requirements, and Anti-Money Laundering requirements.

On March 25, the FDIC eliminated the “reputational risk” category from bank exams, opening a path for banks to work with digital assets. Reputational risk is a term that underscores the dangers banks face when engaging with certain industries.

Related: FDIC resists transparency on Operation Chokepoint 2.0 — Coinbase CLO

Digital asset derivatives won’t be treated differently — CFTC

While the US crypto derivatives market had been a gray zone due to regulatory uncertainty, that has been changing. On March 28, the CFTC withdrew a staff advisory letter to ensure that digital asset derivatives — a type of trading product — will not be treated differently from other types of derivatives. The revision is “effective immediately.”

The change in tone from the CFTC and FDIC follows a new environment for crypto firms under US President Donald Trump’s administration. Trump has vowed to make the US “the crypto capital of the planet.”

Crypto firms are shifting strategies to align with the easing regulatory climate. On March 10, Coinbase announced the offer of 24/7 Bitcoin (BTC) and Ether (ETH) futures. In addition, the company is reportedly planning to acquire Derebit, a crypto derivatives exchange.

Kraken, another US-based cryptocurrency exchange, has also made moves in the derivatives market. On March 20, it announced the acquisition of NinjaTrader, which would allow the exchange to offer crypto futures and derivatives in the United States.

Magazine: Trump’s crypto ventures raise conflict of interest, insider trading questions