Crypto analyst Benjamin Cowen is predicting that Bitcoin’s next price surge won’t be as dramatic as the last one. He shared his analysis with his over 800,000 YouTube followers.
Diminishing Returns for Bitcoin?
Cowen points out that Bitcoin’s return on investment (ROI) is already showing signs of slowing down. He compared the current cycle’s ROI to the previous two. While the current cycle’s ROI is impressive, it’s falling short of the previous cycle’s peak gains. He believes this trend will continue.
“Two cycles ago, Bitcoin’s ROI was around 5.55x. This cycle, it’s between 6.1x and 7x. Last cycle it hit 9.9x. It’s fascinating how history seems to be repeating itself, but the expectation is that it will eventually fall below the ROI of two cycles ago,” Cowen explained.
The Market Cap Factor
Cowen attributes this potential slowdown to Bitcoin’s growing market cap. Simply put, the larger Bitcoin becomes, the harder it is to achieve the same percentage gains as before. It takes exponentially more money to move the market significantly.
He draws a parallel to the previous cycle, where many initially predicted diminishing returns. While the ROI was initially higher than the cycle before, it ultimately fell short by the end. Cowen expects a similar pattern this time around. He notes that two cycles ago, Bitcoin saw a 100x increase from its bottom, something far less likely to repeat given its current size.
Bitcoin’s Current Price
At the time of writing, Bitcoin is trading around $101,100, down about 1% in the last 24 hours.
Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. Always do your own research before investing in cryptocurrencies.
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