The crypto market has been known to follow a four-year cycle, with periods of growth and decline. However, according to Polygon co-founder Sandeep Nailwal, this cycle is no longer as pronounced due to the maturation of crypto as an asset class and the involvement of institutional investors.

In a recent episode of Cointelegraph’s Chain Reaction, Nailwal explained that the overall speculative activity in the market has decreased due to high interest rates in the United States and low liquidity conditions. However, he believes that once interest rates are cut and the new administration settles in, the market will rebound.

Nailwal also noted that while there may still be 30-40% drawdowns between cycles, the four-year cycle is now less pronounced. In the past, the market has seen 90% drawdowns, but Nailwal believes that with the maturation of the market, these drawdowns will be less severe and more professional.

He also predicts that once the market uptrend resumes, capital will rotate from larger cap assets to smaller cap assets. This is a sign of a more mature market, where investors are looking for opportunities beyond the well-established “blue chip” assets.

However, the four-year cycle is not the only factor that has been disrupted in the crypto market. US President Donald Trump’s executive order establishing a Bitcoin strategic reserve has also had an impact. This, along with pro-crypto policies from the Trump administration, has legitimized crypto in the eyes of institutional investors and brought in new capital flows.

The rise of exchange-traded funds (ETFs) has also disrupted the four-year cycle by propping up the prices of digital assets that have ETFs. This has sequestered capital in these investment vehicles, preventing it from freely rotating into other assets.

Additionally, macroeconomic pressure and geopolitical uncertainty have also played a role in disrupting the market cycle. Investors tend to flee riskier assets during times of uncertainty, which can affect the overall market.

In conclusion, while the four-year cycle may no longer be as pronounced, there are still many factors at play in the crypto market. As the market continues to mature and institutional investors become more involved, we can expect to see a more stable and professional market with less extreme fluctuations.