The world of Bitcoin and its market cycles has been a topic of intense scrutiny and speculation, especially as we navigate the aftermath of the 2024 halving event. An intriguing analysis by Alex Thorn, the head of research at Galaxy, has shed light on a potentially worrying trend.
The Underperformance of Cycle Four
Thorn's comparison of the current Bitcoin cycle to its three predecessors reveals a stark contrast. The price action since the 2024 halving has been notably subdued, with significantly lower volatility and upside potential. This cycle's all-time high, which occurred in October 2025, was a mere 97% above the halving price, a far cry from the dramatic increases seen in previous cycles.
Personally, I find this a fascinating development. The 2012 halving cycle saw BTC's price skyrocket by an astonishing 9,294%, reaching a high of around $1,163. The 2016 cycle wasn't far behind, with a 2,950% increase. Even the 2020 halving, which many considered a more mature market, saw a substantial 761% price surge.
So, why is the current cycle, or 'Cycle Four' as Thorn calls it, so dramatically underperforming? Thorn poses an intriguing question: "Is this the new normal, or is it the new normal until it isn't?"
Changing Market Dynamics
One theory is that traditional market dynamics are evolving. The decreasing volatility in each successive halving cycle suggests that BTC's price is becoming less influenced by the halving event itself and more by other, perhaps external, factors.
The Bitcoin Volatility Index, which has historically spiked during halving cycles, has remained remarkably subdued in the current cycle. This could indicate a shift in the market's focus and the emergence of new drivers for BTC's price.
The Anomaly of the Premature All-Time High
Critics of Thorn's analysis point to an anomaly in the current cycle: the premature all-time high that occurred in March 2024, just one month before the halving. This historic event, triggered by the approval of spot Bitcoin ETFs in the US, skewed the cycle's price performance.
However, this anomaly also highlights the changing nature of Bitcoin's market. The approval of ETFs represents a significant shift in institutional acceptance and could be a key factor influencing BTC's price trajectory.
Drawdowns and Volatility
Another interesting development is the decrease in severity of Bitcoin's drawdowns. Fidelity Digital Assets notes that previous bear markets saw declines of 80% to 90%, but the recent crash from the all-time high to $60,000 represents a much milder decline of just over 50%.
This could be a sign that Bitcoin is maturing as an asset class and becoming less volatile, which could make it more attractive to institutional investors.
Looking Ahead
As we navigate the current cycle, it's important to consider the broader implications. The changing market dynamics and the potential shift in focus away from the halving event could signal a new era for Bitcoin.
Jan van Eck, CEO of VanEck, believes BTC is close to bottoming out and expects a gradual price rise in 2026. This prediction, if accurate, could mark a turning point in Bitcoin's journey and further solidify its position as a legitimate asset class.
In conclusion, the underperformance of Cycle Four raises intriguing questions about the future of Bitcoin. As we move forward, it will be fascinating to see how the market adapts and whether the 'new normal' becomes a long-term trend or a temporary phase.
