The Evolution of Crypto Cycles

Crypto, like more traditional markets, is subject to cycles. The price of bitcoin exploded from under $1,000 at the start of 2017 to just under $20,000 by the end of it, but then also saw the value fall to under $4,000 a year later. By looking at the history of bitcoin’s valuation as a proxy for crypto asset valuation across the market, we can clearly spot three major cycles. 

The cyclical nature of the bitcoin’s price also tends to line up with bitcoin’s halvings, which is when the reward for mining a Bitcoin block gets cut in half, slowing issuance. The main cycles that emerge when looking at the value of bitcoin (on a logarithmic scale) are 2012 to 2016, 2016 to 2020, and then 2020 to potentially 2024, which is the current cycle. Each cycle typically starts strong with some upward momentum and then goes through a correction where valuations drop slightly and then stay relatively steady.