Cyclicality of the crypto-currency market

Purpose: This article examines the cyclicality of the cryptocurrency market, focusing on Bitcoin and Litecoin. The study aimed to understand the characteristics of price movements and identify halving-related patterns that may indicate recurring trends or anomalies. Design/methodology/approach: The paper adopted two research hypotheses: (H1) the cryptocurrency market is characterized by cyclicality resulting from Bitcoin halvings, and (H2) halving cyclicality is not exclusive to Bitcoin. The study was conducted based on data covering the period from August 16, 2014, to August 31, 2024, spanning across the second, third, and part of the fourth Bitcoin cycle. Classic Bitcoin cycle models were employed. Findings: The results indicate significant connections between Bitcoin and altcoin prices, confirming Bitcoin as a leading indicator in forecasting altcoin price highs and lows. Additionally, Litecoin analysis showed halving cyclicality is not exclusive to Bitcoin, though weaker in altcoins. The findings highlight cyclicality's significance in cryptocurrency market analysis and suggest further investigation. Research limitations/implications: The limitation of the conducted research was the amount of available data. The cryptocurrency market is very young, less than a dozen years old. Practical implications: The research results can be used to shape the investment decisions for investors. Originality/value: The small number of studies related to the behavior of cryptocurrency prices other than Bitcoin within its halving cycles and the lack of studies on potential cycles resulting from halvings of other cryptocurrencies constitute a research gap worth filling. Keywords: cryptocurrencies, bitcoin, altcoins, cyclicality. Category of the paper: research paper, conceptual paper.