Is Bitcoin’s Four-Year Cycle Over?

Introduction

As bitcoin matures, price behavior is diverging from previous cycles. At an all-time high market cap of approximately $2.5 trillion as of October 2025, bitcoin is significantly larger in scale and more liquid than in the past.

For most of its existence, bitcoin’s volatility has risen in tandem with price, culminating in multiple cycle-ending blow-off tops at new all-time highs. In contrast, the current cycle has exhibited a markedly different pattern, with volatility decreasing even as price reached new highs above $126,000 in October 2025 per Glassnode.

This article explores the changing dynamics of bitcoin as it transitions from a speculative asset to a more mature, institutional-grade savings mechanism. It also examines the possibility of fewer boom-and-bust cycles and more methodical rises and pullbacks. Ultimately, the Fidelity Digital Assets® Research team seeks to answer the following question: Is bitcoin’s four-year market cycle over?

Bitcoin Fundamentals Have Changed

In its early days, bitcoin was viewed as a highly speculative investment with significant risk and virtually no track record. This resulted in sharp boom-and-bust cycles as investors tried to properly value this new digital currency. Over the last 17 years, bitcoin has proven that it has staying power and, with its all-time high market cap of $2.5 trillion, it has garnered the attention of several major traditional investment firms.

In addition, regulatory frameworks are becoming clearer, and bitcoin is increasingly integrated with the traditional markets through exchange-traded products (ETPs), traditional exchanges, and public companies. 

As this evolution unfolds, the Fidelity Digital Assets® Research team believes bitcoin’s price may act differently than past cycles. As recently as 2021, bitcoin was largely overlooked by most major institutions and primarily regarded as a high-risk investment with extreme volatility. Apart from El Salvador, most governments avoided bitcoin, while others sought to restrict or shut down businesses associated with it.

That sentiment shifted in 2025, driven largely by the U.S. as the digital assets sector became a focal point for the current administration. This has led to a more supportive environment for builders and investors alike. Bitcoin is no longer an outlier within the financial market—a change which is increasingly evident in the data.

Changing Volatility Dynamics

Historically, bitcoin’s price experiences all-time low volatility prior to an all-time high price. The most recent cycle followed this pattern: One-year realized volatility began hitting new lows on September 28, 2023, when bitcoin’s price stood at $27,000. Between September and November 2023, Bitcoin recorded 13 new lows in volatility, followed by a new high of $68,000 on March 4, 2024.

Viewed through this lens, this behavior closely mirrors the dynamics of the 2013 and 2017 cycles, as illustrated on the chart “Bitcoin: All-Time Highs in Price and All-Time Lows in Volatility”. 

Where this cycle differs is in the fact that we are beginning to see new all-time lows in volatility much sooner than previous cycles. We have seen 17 new instances of all-time lows in one-year realized volatility in January 2026, just months after reaching all-time highs in price. Persistently low volatility amidst new highs in price points toward a more mature bitcoin that may not continue to follow the historical four-year cycle pattern.  

This newfound dampening of volatility may be due to bitcoin’s increase in size and liquidity. Bitcoin is now two times larger than its market cap at the cycle peak in 2021, nearly 10 times larger than at the 2017 cycle peak, and over 200 times larger than at the 2013 peak. Simply put, bitcoin now resembles a mature asset with meaningful staying power and deep pools of liquidity.

From a market cap standpoint, comparing bitcoin today to bitcoin in 2013 is similar to comparing Apple today to Apple in 2004, three years before the first iPhone launched. Some may argue that bitcoin remains largely unchanged since 2013, and from a technical standpoint, that assessment is largely accurate. However, the demand dynamics of bitcoin today are vastly different than those of even four years ago. 

Changing Demand Dynamics

Given the launch of spot bitcoin ETPs alongside increasing accumulation of bitcoin amongst public companies, it appears that bitcoin is maturing as institutional demand grows. For example, 49 public companies each hold over 1,000 bitcoin, with their combined holdings exceeding 1 million bitcoin—accounting for over 5% of bitcoin’s circulating supply. 

Moreover, the public company cohort has shown to be a resilient holder base. Dating back to Q1 2020, this group has increased its total holdings every quarter-over-quarter except Q2 2022, when Tesla sold a large portion of its bitcoin holdings. A more extensive review of this cohort can be found in a previous piece from the Fidelity Digital Assets Research team, “Bitcoin’s Illiquid Supply: A New Era for Investors”.

In January 2024, the first spot bitcoin ETPs launched in the U.S. As of January 30, 2026, these vehicles collectively held nearly 1.3 million bitcoin, accounting for 6.4% of the circulating supply. These have been a success based on most measures: Assets under management for the leader in the space surpassed $75 billion in under two years. By comparison, GLD (the gold market’s ETP equivalent), took nearly seven years to surpass the same milestone.¹

The chart “Percentage of BTC’s Circulating Supply Held by ETPs and Public Companies” illustrates the rising share of bitcoin held over time by public companies (with 1,000 or more bitcoin) and ETPs: 

These two groups now hold nearly 12% of bitcoin’s circulating supply. The majority of this growth occurred post-2023, marking a major shift in the demand dynamics of bitcoin.

Comparing Bitcoin’s Cycles

After identifying several key shifts in bitcoin’s market structure, including lower volatility, larger market cap, and institutional adoption, it is important to examine how these changes have affected various data sets.

There are many different approaches to compare bitcoin’s historical cycles, but this analysis will focus strictly on the period in each cycle when the percentage of addresses in profit first exceeded 95% to the instance where it last remained above 95%. Using this strict framework allows for a clearer understanding of each bull market environment and helps to identify potential deviations in the current cycle.

More specifically, the following timeframes will be compared: 

• 2013 Cycle: January 21, 2013 – December 4, 2013
• 2017 Cycle: June 12, 2016 – January 6, 2018
• 2021 Cycle: August 1, 2020 – November 15, 2021
• 2025 Cycle: February 26, 2024 – October 26, 2025

The first metric reviewed was bitcoin’s market value to realized value (MVRV). This compares bitcoin’s market value to realized value over time by dividing market cap by realized cap (realized cap representing the total amount of capital invested in an asset).

The data in this current cycle reflects a notably stable bitcoin as its market cap has remained roughly twice the realized cap throughout most of the bull market. When compared with previous cycles, as seen on the chart “Bitcoin’s Entity-Adjusted Market Value to Realized Value,” past cycles appear more erratic, exhibiting pronounced shifts to the upside during high-profit conditions:

This means that over the last year and a half, bitcoin has largely been valued within a reasonable range relative to the total capital invested. Despite elevated profit levels, the market cap has primarily remained between two to three times the realized cap.

By comparison, during the 2013 bull market, bitcoin’s market cap reached six times the value of realized cap. Moreover, the 2017 and 2021 cycles both saw market cap reach four times the value of realized cap.

The 2025 cycle’s more subdued activity offers insight into how bitcoin may be behaving differently as a larger, more liquid asset. If bitcoin’s market cap were to reach even four times the value of realized cap this cycle, it would imply a market cap of roughly $4.5 trillion and a bitcoin price of roughly $225,000 as of February 2, 2026.

The next metric that signals the possibility of a more mature bitcoin market is the Puell Multiple, which is calculated by dividing the value of the daily issuance of bitcoin by the value of the 365-day moving average of daily issuance.

By incorporating bitcoin’s annual supply issuance, the Puell Multiple provides an effective gauge as to whether significant price deviations have occurred within the past year. As demonstrated in the chart “Bitcoin’s Puell Multiple,” the metric has remained remarkably close to one throughout the current cycle. This means that the value of the daily issuance has not deviated much from the 365-day moving average. 

Moreover, from the 2013 cycle to today, each successive cycle has had less dramatic swings, showing the maturation of bitcoin over the years and making the current cycle appear comparatively restrained.

Lastly, the Fidelity Digital Assets Research team created a new metric, the “Profit to Volatility Ratio.” This metric calculates the percentage of bitcoin addresses in profit divided by one-year realized volatility, providing insight into the overall stability of the bitcoin market over time.

A measurement above 0.01 can be considered very stable, as achieving such a result requires both generally high profit and generally low volatility. Conversely, a measurement below 0.01 should be viewed with caution, as it indicates that profit is falling swiftly, volatility is swiftly rising, or a combination of both. 

As shown in the chart “Bitcoin’s Profit to Volatility Cycles,” each previous cycle has seen this ratio trend lower over time, driven largely by rising volatility, given that this analysis focuses on periods of high profit.

This is very different compared to the current cycle, where persistently high profit is occurring alongside declining volatility. To reiterate, in each previous cycle, the downward trajectory of this metric suggested increasing volatility as profit persisted, a pattern more akin to traditional boom-and-bust dynamics. However, the current data reflects a divergence in behavior.

If this cycle is indeed different, as the data suggests, and a classic boom-bust pattern is not the likely outcome, it would be reasonable to anticipate that the chances of a prolonged bear market are lower as well.

In fact, the notable stability showcased over the last year and a half may suggest that while bitcoin is not rising to dramatic new heights, it is also avoiding steep lows. In an extended environment of high profit and low volatility, bitcoin may simply grind higher over time without the extreme swings that defined earlier cycles.

Lastly, when examining the full history of the “Bitcoin’s Profit to Volatility Ratio” chart, it can be seen that the ratio has remained above 0.015 since late 2023. This suggests a more stable bitcoin for over two years, the longest sustained period at these levels in the asset’s history. Moreover, bitcoin remains well above the 0.01 threshold identified earlier, even as a recent downturn in price brought the asset below $70,000 as of February 2026.

Conclusion

When assessing the data outlined above, a strong case can be made that the typical four-year cycle investors have become accustomed to may no longer apply. In bitcoin’s early days, a significant share of supply was held by individuals in self-custody or on a limited number of exchanges. This was a more volatile and speculative environment, with demand driven mostly by technology enthusiasts and the financially curious. Today, there is a new demand dynamic taking shape as institutions participate through a variety of channels.

These new buyers are fundamentally changing the structure of the bitcoin market. Although volatility to both the upside and downside will persist, the traditional four-year, boom-bust cycles featuring blow-off tops and steep 80% drawdowns may be a thing of the past. As bitcoin continues maturing, it appears to be leaving behind its more volatile era altogether, potentially marking the end of the four-year cycle.

For investors, this emerging stability suggests that bitcoin may now warrant consideration not just as a short term tactical position, but as a long term portfolio component behaving more like a maturing macro asset.

Interested in how these dynamics may shape your institutional strategy? Get in touch.