Novogratz: US Crypto Laws May Break 4-Year Market Cycle

The United States cryptocurrency landscape is undergoing a fundamental shift with the passage of two landmark bills: the stablecoin-regulating GENIUS Act, signed into law in July, and the CLARITY Act, which clearly outlines regulatory agencies’ jurisdiction over digital assets. According to Mike Novogratz, CEO of Galaxy Digital, this legislative clarity is not merely incremental progress but a potential catalyst for a structural change in market behavior. In a recent interview with Bloomberg, Novogratz articulated that these laws directly address the primary barrier to entry for a significant cohort of potential investors: regulatory uncertainty.

The GENIUS Act provides a comprehensive federal framework for stablecoins, bringing much-needed oversight to a cornerstone of the crypto economy. Simultaneously, the CLARITY Act resolves longstanding jurisdictional ambiguities by defining which US agencies—such as the SEC and CFTC—oversee specific types of crypto assets. Novogratz contends that this dual legislative victory reduces the legal and compliance risks that have kept many institutional and sophisticated retail investors on the sidelines. By establishing clear rules of the road, the United States is effectively opening the floodgates for a new wave of capital that operates on a different set of incentives than the existing crypto-native base.

The core of Novogratz’s argument lies in the potential disruption of the crypto market’s well-documented four-year cycle. This pattern has historically been tethered to the Bitcoin halving event, which occurs approximately every four years and reduces the block reward granted to miners, effectively slowing the rate of new BTC supply. The last halving took place in April 2024, and according to the traditional cycle, the subsequent bull market could be nearing its end. This cyclicality has become a deeply ingrained belief among market participants, shaping investment strategies and market timing.

Novogratz suggests that this cycle is a product of a specific market environment—one characterized by a relatively insular community of investors and a lack of mature regulatory infrastructure. The influx of new participants catalyzed by the GENIUS and CLARITY Acts, he argues, could overwhelm the historical supply-demand dynamics driven primarily by the halving. Instead of a market propelled by a predictable, event-driven scarcity narrative, the entry of large-scale, long-term capital seeking regulatory-approved exposure could create a more sustained, less volatile growth trajectory. This would represent a fundamental decoupling of crypto market performance from its previously cyclical nature.

The potential breaking of the four-year cycle signifies a critical step in the maturation of cryptocurrency as an asset class. For Galaxy Digital and other established firms in the space, a market less prone to extreme boom-and-bust cycles based on a single event is a more attractive environment for building sustainable businesses and financial products. It suggests a future where crypto valuation is driven by a broader set of fundamentals, including adoption rates, technological utility, and macroeconomic factors, much like traditional finance.

While the sentiment from Novogratz is overwhelmingly positive, the market is now in a watch-and-see phase. The true test will be the pace and scale at which new capital enters the ecosystem under these new regulatory frameworks. If Novogratz’s prediction holds, the United States will have successfully used legislation not just to protect consumers, but to engineer a more stable and mature digital asset market. The coming months will reveal whether the historical patterns that have defined Bitcoin and the broader crypto space for over a decade are indeed on the verge of being rewritten by the power of regulatory clarity.