The Cycle Looks Soft, Until You Check the Starting Line

Galaxy Digital's head of firmwide research, Alex Thorn, published analysis comparing Bitcoin's current halving cycle to its three predecessors. His headline data is stark. The 2012 cycle produced approximately 9,294 percent gains from the halving price to peak. In 2016, the figure was roughly 2,950 percent. The 2020 cycle returned 761 percent. Measured from the April 2024 halving price of approximately $63,000 to a recent peak above $125,000, the current cycle has returned 97 percent.

'Cycle four is dramatically underperforming prior cycles. Is this the new normal, or is it the new normal until it isn't?'

Thorn frames it as an open question rather than a conclusion. He is not claiming the cycle is over or Bitcoin is broken. He is noting a pattern divergence and asking what it means.

The Comparison Baseline Problem

A significant complication undermines the direct comparison. Bitcoin hit an all-time high above $70,000 in March 2024, one month before the April halving. That pre-halving peak was driven by the launch of spot Bitcoin ETFs in the United States in January 2024, after the Securities and Exchange Commission (SEC) approved them, which pulled institutional demand forward in an unprecedented way. No previous cycle featured a major structural demand catalyst immediately before the halving event.

Prior cycles measured gains from a halving price that was typically well below recent highs. A $63,000 halving baseline that is itself near an all-time high produces a structurally smaller percentage gain, even when absolute dollar appreciation is substantial. Fidelity analyst Zack Wainwright observed that Bitcoin drawdowns have become less severe as volatility has declined, a point supported by the Volatility Index data: it peaked at 9.64 percent during the 2020 cycle and sits at 1.75 percent today.

What Declining Percentage Returns Actually Mean

Each halving cuts new bitcoin supply in half. Block rewards started at 50 bitcoin, then fell to 25, then 12.5, then 6.25, and now sit at 3.125 bitcoin after the 2024 halving. At each step, the supply shock is proportionally smaller relative to the existing float. A mathematical argument for declining percentage returns follows directly: supply squeezes shrink in relative magnitude, and the asset base is larger and more liquid. Enormous percentage returns require enormous demand against tiny supply. Bitcoin's supply schedule is well-understood and priced in by increasingly sophisticated market participants.

Lower volatility in a larger, more liquid asset is not a failure signal. It is a maturation signal. Fidelity's Wainwright is right that less severe drawdowns reflect a more stable asset, not a broken one.

Why It Matters

Four-year cycle narratives have always been heuristics, not laws. They emerged from observing that halvings tend to precede bull markets, and the mechanism is real: reduced new supply against steady or growing demand should raise price. But return magnitude depends on starting conditions, and those conditions changed materially in 2024. A Bitcoin entering the 2024 halving at near all-time highs, with spot ETF approval already achieved, is not the same asset entering the 2020 halving from $8,000. Thorn's question deserves a humble answer: stay humble and stack sats. Nobody predicts the price with accuracy. What is verifiable is that the supply schedule is intact, the network is stronger, and the asset is larger and more stable than ever before. That is the signal. Cycle percentage returns are just the noise.