Many are hoping for a market correction similar to 2020's COVID-19 crash, but this cycle is different from previous ones. In fact, it closely mirrors the 2011/14 cycle. Here's why:
We've gone through three complete Bitcoin cycles, and we're currently in the fourth:
1. **2011/14âEarly Adopters Cycle:** This was the cycle for the true believers, the early adopters who saw potential in Bitcoin before most people had even heard of it. Only the most dedicated and tech-savvy participated, driven by a belief in what was then seen as a speculative internet currency.
2. **2014/18âFirst Hype Cycle:** The first major wave of interest came from those who missed out on the early gains of Bitcoin. Fueled by the launch of Ethereum and altcoins, this cycle saw a boom in ICOs, many of which turned out to be scams. After the peak, retail investors faced significant losses as 99% of ICO projects failed.
3. **2018/22âSecond Hype Cycle:** This was crypto's first major hype cycle, though Bitcoin itself underperformed. Altcoins led the charge, with narratives like DeFi yield farming (e.g., YFI and SUSHI), GameFi, and a wild memecoin season (e.g., Safemoon). Many investors from the last cycle went into full gambling mode with altcoins. The collapse of major entities like FTX, 3AC, and LUNA marked the end of this cycle, leaving retail investors devastated.
4. **2022/26âGlobal Adoption Cycle:** This current cycle resembles the 2011/14 period because retail interest in Bitcoin has waned, with many believing it's "too expensive" or offers "less growth potential."
