Quick take
The theory of diminishing returns, suggesting that Bitcoin will produce smaller returns with each cycle, is under scrutiny. Examining this theory from two perspectives, the cycle's lowest and the cycle's all-time high, provides some interesting insights.
In November 2022, the bottom of the Bitcoin cycle occurred during the FTX collapse, falling to around $15,500. Since then, Bitcoin has managed a staggering 287% appreciation, surpassing the returns of the 2015 to 2018 cycle (173%) and the 2018 to 2022 cycle (106%).
Considering the cycle since its all-time high, the bear market began shortly after the April 2021 high, presenting a similar scenario.
We observe that Bitcoin has already reached its all-time high since April 2021 of around $63,000, a significant improvement compared to previous cycles. At this point in the 2013 to 2017 cycle, Bitcoin needed an increase of around 35%, and during the 2017 to 2021 cycle, a 20% increase was needed.
In conclusion, while this analysis does not necessarily disprove the theory of diminishing returns, it highlights the strength of the current Bitcoin cycle.
The post Analysis Challenges Bitcoin's Diminishing Returns Theory Amid Recent Gains appeared first on CryptoSlate.