Recent analysis from on-chain data provider Glassnode reveals that the current Bitcoin market cycle is experiencing significantly lower average returns than previous cycles.
Bitcoin’s performance in the ongoing cycle, which began after hitting bottom in November 2022, shows notable changes in return on investment (ROI) and market volatility, according to data shared by the on-chain analytics firm.
The data compares the current cycle with the previous two bull markets, highlighting a transition in Bitcoin’s behavior as it matures into a larger, more stable asset class.
Bitcoin Seeing Least ROI
For example, from Bitcoin’s bottom in 2015 to the end of the cycle in 2018, it registered a 5.90X (590%) growth during that bull season.
The subsequent cycle, from 2018 to 2022, saw even more impressive gains, with Bitcoin registering a 10.47X (1,047%) price growth from the lows to the highs.
In contrast, in the current cycle, where Bitcoin bottomed at around $15K in late 2022, it has so far registered a 598% price growth, based on its recent all-time high of $104K.
According to Glassnode, this cycle is 26.94% below the average growth of the last two cycles.
Bitcoin Volatility Eases, Experiencing the Least Volatile Cycle
Meanwhile, regarding market volatility, the current cycle also stands out for its relative stability. When comparing drawdowns or peak-to-trough declines in price, Bitcoin’s volatility has significantly decreased.
For instance, the average drawdown in the current cycle is -7.68%, much lower than the -16.24% average across all cycles.
Likewise, the maximum drawdown has been -26.25% since 2022, compared to a dramatic -71.15% drawdown during the 2011-2013 cycle.
This marks Bitcoin’s least volatile cycle to date, suggesting that the market is becoming more resilient and less prone to extreme price swings.
Bitcoin Seen as a More Stable and Institutionalized Asset Class
According to Glassnode, the combination of lower ROI and smaller drawdowns points to Bitcoin’s gradual transformation into a more stable, institutionalized asset.
These metrics suggest that Bitcoin is no longer as volatile as it once was, a crucial factor for attracting traditional investors and institutional players who demand more stability.
Lower ROI and smaller drawdowns highlight #Bitcoin’s evolution into a larger, more stable asset class. Bottomline: the current cycle showcases #BTC’s resilience amid an increasingly institutionalized market.
— glassnode (@glassnode) December 11, 2024
Essentially, Glassnode’s analysis underscores Bitcoin’s growing maturity as an asset class. While it may not produce the astronomical returns of previous cycles, it demonstrates resilience amid an increasingly standardized and regulated market environment.
