21Shares Says Bitcoin Still Tracks the Halving Rhythm as BTC Slips Under $60K

Bitcoin’s slide back below $60,000 for the second time this month has forced a reset of one popular view: exchange-traded funds wouldn’t be enough to snap Bitcoin out of its four-year halving rhythm. In its latest State of the Market update, 21Shares acknowledged that the cycle it expected to end in 2026 still looks intact—though the contours of the market are evolving.

Here’s the tension worth focusing on: spot ETFs have changed who owns Bitcoin but not yet how Bitcoin trades. The firm notes today’s drawdown—about 52% from the $126,080 all-time high—remains far milder than the 80%+ washouts seen in prior cycles. That aligns with a market supported by institutional ETF holders who rebalance rather than panic. Price near $59,781 on Wednesday, while still above an on-chain cost basis around $54,000 per Glassnode, suggests the market hasn’t seen full capitulation.

If ETFs were going to truly rewire the cycle, flows needed to overpower the halving’s incremental supply shock and the industry’s periodic leverage resets. That didn’t happen. Instead of the push toward $400 billion in crypto ETF assets under management that 21Shares anticipated for this year, funds have struggled to attract durable net inflows. CoinGlass data shows nearly $3 billion exited crypto ETFs in the last quarter, and roughly $5 billion has left since the start of the year. With net selling pressure from the wrapper itself, ETFs dampened volatility but couldn’t deliver the structural bid to break the cadence.

Why this matters: the ETF wrapper imported institutional risk management into Bitcoin. That often means quarterly rebalancing, VaR constraints, and faster de-risking on macro stress—mechanics that can smooth drawdowns but extend them. Psychologically, ETF buyers are price-sensitive and benchmark-aware; they don’t chase in the same way as native crypto participants. Technologically, nothing about the halving changed: issuance fell, but miner behavior, derivatives liquidation dynamics, and on-chain liquidity still drive the same boom-bust pattern—just with softer edges.

The spillovers from a tougher macro and regulatory backdrop compounded the miss. Several other 21Shares calls have lagged: stablecoins have not reached a $1 trillion market cap; DeFi total value locked hasn’t climbed to $300 billion; and crypto treasury firms (DATs) are not at $250 billion in AUM. Lingering regulatory uncertainty, a drumbeat of DeFi exploits, and falling token prices drained risk appetite. Those forces likely diverted capital that might have otherwise supported ETF inflows or DeFi growth.

One area where the thesis is still tracking: prediction markets. 21Shares expected on-chain and regulated prediction platforms to exceed $100 billion in trading volume this year. With Polymarket and Kalshi leading activity, the category had already processed more than $57.5 billion by the end of May, keeping that milestone well within reach. The appeal here is straightforward—binary outcomes, short duration, and a clear product-market fit around event risk.

So where does that leave the cycle debate? The structure appears bent, not broken. ETF ownership is more institutional, drawdowns are shallower, and the market is holding above widely watched on-chain cost bases. But with BTC back under $60,000 and ETF capital still net negative year-to-date, the halving-era rhythm persists. For a genuine break, watch for a sustained turn to positive ETF flows alongside improving regulatory clarity and fewer security failures in DeFi—conditions that could finally create the steady bid that overpowers old patterns.