Bitcoin Halving One Year Anniversary: This Cycle Shows New Characteristics

It's been a year since Bitcoin's last halving, and this cycle is showing a markedly different character from previous years. Unlike the explosive growth after the previous halving, the increase in bitcoin this time was relatively modest, rising by only 31%. This compares to a 436% increase in the same period in the previous cycle.

At the same time, long-term holder indicators (such as the MVRV ratio) show a significant decline in unrealized profits, indicating that the market is gradually maturing and the upside potential is being compressed. Overall, these changes suggest that Bitcoin may be entering a new phase, no longer experiencing parabolic peaks, but rather showing more gradual growth driven by institutions.

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What's unique about this Bitcoin cycle

The trajectory of this Bitcoin cycle is significantly different from previous years, which may indicate that the way the market reacts to the halving event is changing.

In the early cycles (especially from 2012 to 2016, and from 2016 to 2020), Bitcoin typically experienced strong increases during this phase. The period following Halving is often accompanied by strong upward momentum and parabolic price trends, primarily driven by retail enthusiasm and speculative demand.

However, the current cycle shows a different trend. The price did not accelerate after the Halving; instead, it started to soar in October and December 2024, then consolidated in January 2025, followed by a pullback in late February.

This behavior of an early rise is very different from the historical pattern, where halvings in the past often acted as a catalyst for large increases.

There are a number of factors contributing to this shift. Bitcoin is no longer just a speculative asset driven by retail investors, it is increasingly seen as a full-fledged financial instrument. Increasing institutional investor participation, coupled with macroeconomic pressures and changes in market structure, has led to a more cautious and complex market response.

Another obvious sign of this evolution is that the intensity of each cycle is weakening. As Bitcoin's market capitalization grows, the explosive increases seen in the early years are becoming harder to replicate. For example, during the 2020 to 2024 cycle, Bitcoin rose by 436% one year after the Halving. In contrast, the increase during this cycle was only 31%, much more moderate.

This shift could mean that Bitcoin is entering a new phase, characterized by reduced volatility and more stable long-term growth. The halving may no longer be the main driver, and other factors such as interest rates, liquidity, and institutional funding are playing a bigger role.

It is worth noting that in previous cycles, there were also phases of consolidation and correction before the recovery of the upward trend. Although this phase may feel slow or lacking in excitement, it may represent a healthy adjustment before the next round of increase.

There is still a chance that this cycle will continue to deviate from historical patterns. Instead of a dramatic top bubble burst, it may present a more persistent, structurally solid uptrend that is driven more by fundamentals than hype.

Long-term Holder MVRV Ratio Reveals Bitcoin Market Maturity

The market value of Long-Term Holders (LTH) and the MVRV ratio have always been reliable indicators of unrealized profits. It shows the profits that long-term investors have made before they start selling. However, over time, this value has been decreasing.

During the 2016 to 2020 cycle, the LTH MVRV ratio peaked at 35.8, indicating a large paper profit and a clear top formation. In the 2020-2024 cycle, this peak dropped sharply to 12.2, even though the Bitcoin price hit an all-time high at that time.

In this cycle, the highest LTH MVRV ratio so far is just 4.35, which is a huge decline. This suggests that long-term holders are making much lower gains than previous cycles, despite the significant increase in the price of Bitcoin. The trend is clear: the return multiples are decreasing every cycle.

The explosive upward potential of Bitcoin is being compressed, and the market is maturing.

This is not an accidental phenomenon. As the market matures, explosive returns naturally become harder to achieve. The era of extreme, cycle-driven profit multiples may be waning, to be replaced by more moderate or stable growth.

The growing size of the market means that exponentially more capital is needed to significantly drive price increases.

However, this does not confirm that the cycle has peaked. Previous cycles have typically consisted of long periods of consolidation or small pullbacks before reaching new highs.

As institutional investors play an increasingly important role, the accumulation phase may last longer. Therefore, the sell-off of peak profits may not be as sudden as in earlier cycles.

However, if the MVRV ratio peak decline trend continues, it may strengthen the view that Bitcoin is transitioning from a frenzied, cyclical surge to a more moderate but structured growth model.

The most extreme price increases may have already passed, especially for investors who entered the market in the later stages of the cycle.