Bitcoin’s Rollercoaster: Are We Done with the Wild Rides?

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  • Ah, behold! Bitcoin’s latest cycle, a mirror reflecting its 2021 and 2017 escapades!
  • But wait! ETFs and institutions might just be the party poopers, dampening those wild rallies and gut-wrenching crashes! 🎢

It seems the classic bull-bear Bitcoin [BTC] cycle is undergoing a metamorphosis, as whispered by the wise sages at Sentora (formerly known as IntoTheBlock). 🧐

In the grand theater of previous cycles, Bitcoin’s long-term holders (LTH) played their roles, hoarding during the gloomy bear markets and unloading during the euphoric bull runs (mostly around halving time). This dance created the familiar bowl-shaped (red) patterns on the crypto’s on-chain charts. 🎭

Yet, lo and behold! The current cycle has thrown a curveball, leaving even the most seasoned BTC cycle analysts scratching their heads in bewilderment. 🤔

“This time, however, the script is different: distribution kicked off much earlier, has unfolded in a slower, stop-start fashion, and shows none of the clean, symmetrical rhythm we’ve come to expect.”

Cycle is on track, but volatility keeps falling

Most analysts, with their crystal balls, have linked these perceived cycle changes to a growing number of institutions embracing BTC. Especially after the U.S. Spot ETFs were given the green light in early 2024. 🚦

In fact, CryptoQuant’s founder, Ji Young Ju, shared a similar outlook after making a rather unfortunate bear market call in early 2025, only for BTC to hit a new all-time high two months later. Oops! 😅

He proclaimed,

“It feels like it’s time to throw out that cycle theory. New liquidity sources and volume are becoming more uncertain, signalling a transition as the Bitcoin market merges with TradFi.”

Despite the aforementioned changes in demand and supply dynamics, the present cycle (epoch 5) has been closely trailing the third (blue) and fourth (green) cycles. But, oh! It slightly diverged in January 2025. How scandalous! 😲

Since the last April halving, Bitcoin has rallied by over 70%, soaring from $63k to over $109k. But, alas! The past cycles were far more generous with their returns. 😩

In the 2020-2021 cycle (epoch 4), BTC pumped by a staggering 354%, while in 2017 (epoch 3, blue), the asset gained over 500%. Talk about a party! 🎉

When we zoom out and look at the compounded annual growth rate (CAGR), it reveals a steady decline. The 4-year BTC cycle CAGR dropped from over 850% in 2015 to about 30% in May 2025. Yikes! 📉

In short, annual investor returns have shrunk over the years – a move some have linked to BTC’s “asset maturity” status as TradFi embraces it. This thesis can also be supported by easing volatility (price swings). 💤

Since the debut of U.S. Spot ETFs, annualized BTC volatility (30-day) has dropped from 78% to 35% – a sign that the asset has become relatively less volatile since early 2024. Who knew stability could be so boring? 😴

When we zoom out from 2017, its volatility has been trending southwards, indicating that BTC has become more mature. Further adoption by institutions may make it even more like stocks or gold. How thrilling! 🥱

Looking ahead, BTC’s massive upside potential may diminish. Despite being the best asset on a risk-adjusted basis compared to most traditional investments. What a twist! 🎭

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2025-05-27 19:10