The report from CME Group and Glassnode highlights the performance of the 2024 BTC market following its fourth halving event, comparing it to previous cycles. Analysts expect drops in volatility and returns in the future, as the market experiences shallower downturns compared to its predecessors. The 2016 and 2020 cycles are considered more relevant points of comparison due to a more mature digital asset landscape. The report notes that after previous halving events, there were months of quiet performance before remarkable peak returns of 350% and 650%, respectively.
Following the recent halving in April, the 2024 BTC market has seen a similar trajectory with the coin’s price trading within a narrow range. Compared to previous bull markets, the current uptrend has experienced relatively shallow drawdowns, with the deepest correction being a 20.3% fall from the local high since November 2022. Previous cycles saw much deeper corrections ranging from 25% to 35% in 2016-17 and 50% to 63% in 2020-21. Analysts expect volatility, returns, and drawdowns to compress over time as Bitcoin grows in size and sees wider institutional adoption.
Realized volatility for Bitcoin has historically been high during periods of reduced adoption, bull markets, and declines but has decreased over time. During the 2017 bull market, rolling realized volatility reached 120%-150% at its peak, while in the 18-month uptrend in 2023-24, it compressed to 40% and 55%. This is less than half of what was seen in the previous cycles, indicating the growth and maturity of the asset class. The report attributes this decrease in volatility to the expansion of institutional interest in the digital asset space, especially as a macro asset class.
In the past 24 hours, BTC has appreciated by 1.1%, currently trading at $57,971. However, it is down 3.1% in a week and 16.4% over the past 30 days. Over the past year, its price has risen by 92.2%, reaching an all-time high of $73,738 in March before falling 21%. The market is closely watching the price performance following the recent halving event, with analysts expecting drops in volatility and stronger returns in the future as Bitcoin continues to grow in size and maturity.
