BTC May Be Entering a New Era Characterized by Gradual Growth Driven by Institutions
(Background: Trump announces significant reductions in tariffs on China, will not dismiss Powell, Bitcoin approaches $94,000 as U.S. stocks surge)
(Contextual Supplement: In-depth analysis: Is Bitcoin’s breakthrough of $93,000 the starting point for a reversal or a secondary distribution of a downward escape wave?)
It has been a year since BTC’s last halving, and this cycle is showing a markedly different trend compared to previous ones. Unlike past cycles that experienced explosive growth post-halving, BTC’s current increase is more moderate, having risen only 31%, whereas the previous cycle saw an increase of 436% in the same timeframe.
At the same time, indicators for long-term holders (such as the MVRV ratio) show a sharp decline in unrealized profits, indicating that the market is maturing and upward potential is being compressed. Overall, these changes suggest that BTC may be entering a new era characterized not by parabolic peaks, but by more gradual growth driven by institutions.
One Year After BTC’s Halving: A Unique Cycle
The development of the current BTC cycle is distinctly different from previous cycles, which may indicate a shift in how the market reacts to halving events. In earlier cycles (especially from 2012 to 2016 and from 2016 to 2020), BTC typically experienced strong upward movements during this phase. The post-halving period was usually accompanied by intense upward momentum and parabolic price trends, largely fueled by retail enthusiasm and speculative demand.
However, the current cycle has taken a different path. The price did not accelerate after the halving; instead, it began to soar as early as October and December 2024, followed by a consolidation phase in January 2025 and a pullback in late February.
This early upward behavior starkly contrasts with historical patterns, where halving events typically served as catalysts for significant price increases.
Multiple factors contribute to this shift. BTC is no longer merely a speculative asset driven by retail investors; it is increasingly being perceived as a mature financial instrument. The participation of institutional investors is on the rise, combined with macroeconomic pressures and changes in market structure, leading to more cautious and complex market reactions.
BTC Cycle Comparison. Source: Bitcoin Cycles Comparison
Another clear sign of this evolution is that the intensity of each cycle is diminishing. As BTC’s market capitalization grows, replicating the explosive increases of earlier years becomes increasingly difficult. For example, in the 2020 to 2024 cycle, BTC rose by 436% a year after the halving.
In contrast, the increase during the current cycle is only 31% over the same period, which is much milder.
This transition may signify that BTC is entering a new chapter characterized by reduced volatility and more stable long-term growth. Halving may no longer be the primary driving force; other factors such as interest rates, liquidity, and institutional capital are playing a more significant role.
The rules of the game are changing, and so too is BTC’s trajectory.
Despite the Changes, Healthy Adjustments May Still Be on the Horizon
It is worth noting that previous cycles have experienced periods of consolidation and pullbacks before resuming an upward trend. While this phase may feel slow or lackluster, it could still represent a healthy adjustment before the next upward movement.
This means that the current cycle may continue to deviate from historical patterns. It may not experience a dramatic top bubble burst but rather exhibit a more prolonged and structurally sound upward trend, driven more by fundamentals than speculation.
Long-term Holder MVRV Ratio Reveals BTC’s Mature Market
The market value to realized value (MVRV) ratio for long-term holders (LTH) has been a reliable indicator of unrealized profits. It reflects the profits realized by long-term investors before they begin to sell. However, over time, this value has been declining.
During the 2016 to 2020 cycle, the LTH MVRV ratio peaked at 35.8, indicating substantial paper profits and a clear top formation. By the 2020 to 2024 cycle, this peak sharply decreased to 12.2, even as BTC prices reached an all-time high.
In the current cycle, the highest recorded LTH MVRV ratio so far is only 4.35, marking a significant decline. This indicates that the earnings obtained by long-term holders are far lower than in previous cycles, despite BTC having experienced considerable price increases. The trend is evident: the return multiples are diminishing with each cycle.
BTC’s Explosive Upward Potential Is Being Compressed
Currently, the highest reading for the LTH MVRV ratio in this cycle stands at 4.35. This notable decrease suggests that the return multiples for long-term holders are much lower compared to previous cycles, even as BTC prices have surged. This pattern points to one conclusion: BTC’s upward potential is being compressed.
BTC Long-term Holder MVRV. Source: Glassnode
This is not a coincidence. As the market matures, explosive returns naturally become harder to achieve. The era of extreme, cycle-driven profit multiples may be waning, replaced by more moderate or stable growth.
Increasing market size implies that exponentially more capital is needed to significantly drive prices up.
However, this does not confirm that this cycle has peaked. Previous cycles typically involved prolonged periods of consolidation or minor pullbacks before reaching new highs.
As institutional investors play an increasingly important role, the accumulation phase might last longer. Consequently, profit-taking at peak levels may not occur as abruptly as in earlier cycles.
Nevertheless, if the trend of declining MVRV ratio peaks continues, it may reinforce the notion that BTC is transitioning from frenzied, cyclical surges to a more moderate yet structured growth pattern. The most dramatic price increases may already be behind us, especially for investors entering the market in the later stages of the cycle.
