A widely followed crypto analyst says that Bitcoin (BTC) is unlikely to print the same gains it did during the last market cycle.
In a new strategy session, crypto trader Benjamin Cowen tells his 842,000 YouTube subscribers that the flagship crypto asset’s return on investment (ROI) will likely dip to levels below what it was two cycles ago.
“Two cycles ago – so market cycle three – the ROI of Bitcoin at this point in the cycle was, about 5.55x. Right now this cycle, Bitcoin’s ROI as measured from the low is 6.1-7x. Last cycle at this point, the ROI was 9.9x.
So you can actually see the ROI is between the last two cycles. It’s kind of fascinating how history has somewhat repeated itself. That doesn’t mean that it’s always going to stay between those two cycles, in fact, at some point the general expectation should be that it would fall below the third cycle’s ROI.”
According to Cowen, the crypto king’s returns will stagnate due to its comparatively larger market cap causing diminishing returns.
“It’s the same thing as last cycle when everyone was sort of debating diminishing returns and whatnot and whether it would actually follow through to the very end. A lot of people thought it would and you can’t necessarily blame them for thinking that. I mean, at some point the last cycle ROI was even higher than the cycle that came before it, but as we got closer to the end of the cycle, you can see that it did fall short of the prior cycle.
I would argue you’ll probably see something similar this time around where it looks like it might track the entire way but at some point, we likely will get some form of diminishing returns. I mean, just to give you an idea, two cycles ago the ROI of Bitcoin from the bottom was a 100x move. The reason why that’s hard to experience in later cycles is because it takes exponentially more money to move the market.”
Bitcoin is trading for $101,100 at time of writing, a 1% decrease during the last 24 hours.
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