In a recent analysis, analyst James Check presents his viewpoint on the development of the Bitcoin market, highlighting the importance of adoption trends and market structure.
Phases of Bitcoin's Market Development
According to Check, Bitcoin has moved through three distinct phases: an 'adoption cycle' from 2011 to 2018, an 'adolescence cycle' from 2018 to 2022, and the current 'maturity cycle' that began after the 2022 bear market. Check asserts that the 2017 peak and the 2022 low were pivotal turning points marking transitions between these phases.
Diverging Views on Market Cycles
Check's perspective diverges from the widely accepted halving cycle theory, which links market peaks to supply shocks resulting from reduced mining rewards. This model assumes clear four-year cycles, while Check and other analysts, such as Matthew Hougan and TechDev, argue that market cycles are better explained by liquidity rather than halving dates.
Overview of Current Market Trends
Nonetheless, Glassnode maintains that Bitcoin remains broadly aligned with traditional cycles, pointing to recent profit-taking and selling pressure as hallmarks of a late-stage bull phase. Check suggests that Bitcoin is evolving into a more stable, institutionally backed asset that may eventually be viewed as a long-term store of value, akin to gold.
The notion that Bitcoin's functionality as an institutional asset may alter the parameters of its market cycle challenges traditional views of the four-year cycle.
