Bitcoin Post-Halving Analysis: A Shift Towards Gradual Growth

One year post-Bitcoin’s halving, the market is witnessing a significant shift. Bitcoin’s price has only increased by 31%, contrasting sharply with past cycles marked by higher appreciation. Institutional involvement and market maturing are reshaping trends, suggesting a move towards gradual growth rather than explosive volatility. The Long-Term Holder MVRV ratio indicates diminishing unrealised profits, reflecting market maturation and compressing potential for future surges.

Bitcoin (BTC) is reflecting a transformative phase a year after its recent halving. Unlike previous cycles which experienced explosive price increases following halvings, BTC has only appreciated by 31% over this timeframe, a stark contrast to the 436% surge seen in the last cycle. Key metrics indicate a decline in unrealized profits among long-term holders, suggesting a maturing market with limited upside potential.

This cycle is distinctly different from earlier ones, which saw aggressive rallies post-halving, driven largely by speculative retail investors. Historically, intervals from 2012 to 2016 and from 2016 to 2020 were characterised by significant upward momentum triggered by halving events. In this current cycle, however, substantial price appreciation commenced earlier, specifically in October and December 2024, preceding periods of consolidation and correction.

Several factors underpin this shift. Bitcoin’s perception has evolved from merely a speculative asset to a sophisticated financial instrument, influenced heavily by institutional investors and macroeconomic conditions. This evolution is evident in the diminishing magnitude of price surges each cycle, as market capitalisation grows. While prior cycles saw gains of 436% post-halving, the current one has only yielded a 31% increase, highlighting a transition to less volatility and more sustainable growth drivers.

Despite the presence of consolidation and corrections in previous cycles, the current phase may indicate a healthy recalibration of expectations prior to potential uptrends. This cycle may eschew the traditional speculative blow-off tops, favouring a steadier, fundamentals-driven trajectory instead. Trends suggest a departure from volatility towards gradual appreciation, influenced by institutional participation, liquidity, and interest rates.

The Long-Term Holder (LTH) MVRV ratio is a critical indicator of unrealized profits among Bitcoin’s long-term investors. Historically, the LTH MVRV ratio peaked at 35.8 during the 2016-2020 cycle, reflecting significant potential profit and market tops. This peak dropped to 12.2 by the 2020-2024 cycle, despite Bitcoin reaching new all-time highs, indicating a decreased profit potential for long-term holders. Currently, the LTH MVRV ratio has only reached 4.35, underscoring this trend of reduced returns.

This decline in LTH MVRV highlights that Bitcoin’s growth trajectory is changing, with diminishing upside potential as the market matures. As Bitcoin’s market capitalisation expands, it requires significantly more capital to influence price movements, leading to a compression of explosive gains. Nonetheless, this does not definitively indicate that the cycle has reached its zenith; historical patterns often include lengthy phases of price stability or minor corrections before achieving new highs.

If the trend of reducing MVRV peaks persists, it may signify Bitcoin’s transition from volatility-driven price spikes to a more regulated growth pattern. Those investing late in the cycle may find that the sharpest price increases are already behind them, pointing towards a future of low volatility and stable growth rather than cyclical peaks and troughs.