Bitcoin Halving One Year Anniversary: The Market Landscape is Changing

Bitcoin has been a year since the last Halving, and this cycle shows a significantly different trend compared to the past. Unlike the explosive increase seen after previous Halvings, this time Bitcoin's increase has been relatively moderate, rising only by 31%, whereas the increase during the same period of the last cycle was as high as 436%.

At the same time, long-term holder metrics (such as the MVRV ratio) show a significant decline in unrealized profits, indicating that the market is maturing and the upside potential is being compressed. These changes suggest that Bitcoin may be entering a new phase characterized not by parabolic peaks but rather by more institutionally driven gradual growth.

This round of the cycle presents new characteristics

The development trajectory of this round of Bitcoin cycle is significantly different from previous years, which may indicate that the market's response to the Halving event is changing.

In the early cycles (especially from 2012 to 2016 and from 2016 to 2020), Bitcoin often experienced a strong rise after the Halving. This phase is usually accompanied by strong upward momentum and parabolic price movements, largely driven by the enthusiasm of retail investors and speculative demand.

However, the current cycle is showing a different path. The price did not accelerate after the Halving, but started to rise early in October and December 2024, then consolidated in January 2025, followed by a pullback in late February.

This behavior of rising in the early stages is completely different from historical patterns, as past Halvings have typically been a trigger for significant increases.

The reasons for this shift are diverse. Bitcoin is no longer merely a speculative asset driven by retail investors; it is increasingly being viewed as a mature financial instrument. The growing participation of institutional investors, along 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 the market capitalization of Bitcoin grows, the explosive increases seen in the early years are becoming increasingly difficult 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 over the same period is only 31%, which is much more moderate.

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

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

This cycle may still continue to deviate from historical patterns. It may not experience a dramatic top bubble burst, but rather present a more sustained and structurally sound upward trend, driven more by fundamentals than by speculative hype.

Long-Term Holder MVRV Ratio Reveals 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 gained before they start to sell. However, over time, this value is declining.

From 2016 to 2020, the LTH MVRV ratio peaked at 35.8, indicating significant unrealized profits and a clear top formation. In the cycle from 2020 to 2024, this peak sharply declined to 12.2, even though Bitcoin's price reached an all-time high at that time.

In this period, the highest value of the LTH MVRV ratio so far is only 4.35, a significant decline. This indicates that the profits gained by long-term holders are far lower than in previous cycles, despite the substantial increase in Bitcoin prices. This trend is evident: the profit multiples in each cycle are decreasing.

The explosive upward space for Bitcoin is being compressed, and the market is moving towards maturity. This is not a coincidence. As the market matures, explosive returns naturally become harder to achieve. The era of extreme, cycle-driven profit multiples may be fading, replaced by more moderate or stable growth.

The continuously growing market size means that exponentially more capital is needed to significantly drive up prices. However, this does not determine that the current cycle has peaked. Previous cycles typically include long periods of consolidation or slight 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.

If the MVRV ratio peak decline trend continues, it may reinforce the view that Bitcoin is transitioning from a frenzied, cyclical surge to a more moderate yet structured growth pattern. The most extreme price increases may have already passed, especially for investors who entered the market late in the cycle.