They believe the flagship cryptocurrency is unlikely to follow the so-called four-year cycle, the widely held belief that BTC peaks and then declines sharply every four years, in accordance with the halving schedule.

Despite the uncertainty surrounding the outlook, we believe the four-year cycle theory will prove incorrect and that Bitcoin's price will potentially reach new highs next year, Grayscale analysts stated.

The leading crypto asset has been experiencing a turbulent period since early October, falling 32% from its peak in November. At the time of writing, it was trading at $87,300, having gained only 0.1% over the past week. Grayscale identified several reasons why Bitcoin could break out of its four-year cycle. Unlike previous bull markets, this cycle has not seen the parabolic rise that typically precedes a major reversal.

Unlike previous cycles, the current market structure sees institutional investors investing in exchange-traded products and digital asset treasuries, rather than retail trading on spot exchanges.

The macroeconomic environment also remains relatively favorable, according to Grayscale analysts, with potential rate cuts and bipartisan support for cryptocurrency legislation in the US creating positive market conditions.