Bitcoin is expected to continue following its traditional four-year cycle pattern, with a post-halving rally followed by a year or more of muted pricing.
This is according to John Singh, vice-president of the Institute of Information Technology Professionals South Africa (IITPSA) board and chair of the IITPSA Blockchain Special Interest Group (SIG), speaking during an IITPSA webinar on the state of crypto.
Singh said that, following the last bitcoin halving in April 2024, there had been some volatility, but that the exponential growth that had been expected was not forthcoming. “This was due in part to major supercycle trends and key macro economic trends.”
He pointed to geopolitical instability, strengthening of gold and changing US policy around crypto currency as some of the factors impacting crypto currency pricing in the past year.
Indicators impacting crypto performance in 2026
“Macro economic indicators impacting crypto include the Consumer Price Index (CPI). When inflation goes up, people spend more money on things like food and electricity and less on crypto, which means the price of crypto may fall.
“However, crypto is also an effective hedge against inflation and can be used as a store of value that is not eroded by inflation,” he said.
M2 money supply is another macro economic indicator impacting crypto, according to Singh: “The supply of money in circulation and in bank deposits has been growing, and this is good for crypto because it means there is liquidity in the system. There is a very high probability that some of that liquidity will go into crypto and keep the price quite high.”
He also highlighted factors such as a weakening dollar, and stronger gold performance. “A weaker dollar is generally good for crypto, so we need to keep an eye on the dollar index. In the last year or so, gold has also been in the limelight – there has been an increase in activity in central bank buying in response to the risk around the world.
“Many people thought bitcoin would be digital gold, but gold remains very strong as a safe haven asset,” he added.
Muted year ahead
Singh said he believed that bitcoin was largely following the same pattern seen in its traditional four-year cycles.
“In 2025 we were in year one of the traditional cycle – the last up cycle,” he said. “If you compare bitcoin growth to other areas of the market, it is surprising to find it has had muted growth compared to other areas like financials, smart contract platforms, consumer and culture, utilities and services, AI and currencies.
“In 2026 I expect a bearish phase where the price drops quite significantly. We have already seen indications of that – bitcoin dropped to 75k in January and it will likely drop to 60k or even slightly below that before the year is up. The third and fourth years of the cycle are where the price starts going up again.”
2026 investing themes
“The economic environment in 2026 will not be any easier than it was in 2025 and it’s likely that there will be difficult conditions and muted price action.
“Macro economic conditions aren’t favouring bitcoin at the moment, but I think that in the long term bitcoin will recover for a number of reasons: one is that the federal reserve will likely start increasing the balance sheet to stimulate the US economy.
“Secondly, there are a lot of long-term holders of bitcoin who see it as a store of value and they do generally keep bitcoin at a certain value. Also there is an injection of funds from ETFs and other treasury companies that have an interest in keeping the price stable.”
While he noted that the US dollar remains well recognised and valued around the world, Singh predicted that rising debt in the US could put pressure on the dollar as a store of value and a safe haven asset, forcing investors to seek other stores of value.
In the crypto space, Singh said StableCoisn – which are pegged 1:1 to the dollar – has increased dramatically in usage. “It’s cheap and effective, and with new regulations coming in, it is becoming more popular. However, there are concerns that people will invest in StableCoins rather than traditional banks,” he said.
Another expected growth area is Asset Tokenisation linking crypto to real-world assets like real estate, equities, derivatives and other high value assets, Singh said.
“Decentralised finance (DEFI) platforms are also expected to accelerate and increase in value. The growing liquidity, interoperability and real world price connections across DEFI platforms position it as a credible alternative to centralised finance.
“In future, more DEFI protocols will integrate with traditional fintechs to benefit from their infrastructure and installed consumer base. Lending platforms, decentralised exchanges and infrastructure will all benefit.”
Singh concludes: “Even though bitcoin may not have the acceleration and volatility it had in the past, I believe there will be steady growth throughout its four year cycle, and it will be a very credible form of investment that can be relied on in the years ahead.”
You can watch the webinar here.