Bitcoin usually tends to crash more than 80% after the end of strong bull runs.

A new report is on announced Recently, California-based hedge fund Pantera Capital noted that BTC’s declines have been less severe lately.

For example, BTC fell as much as 83% in 2013-2015 and 2017-2018 after hitting $ 1,111 and $ 20,089, respectively. Likewise, the Bull Run resulted in major corrections in 2019-2020 and 2020-2021. After that, however, the retracement rate is -61% or -54%.

The rise and fall of Bitcoin | Source: Pantera Capital

Dan Morehead, CEO of Pantera Capital, highlighted the ongoing decline in sales sentiment after the 2013-2015 and 2017-2018 bear cycles, noting that future bear markets will be “weaker”.

“I have long made the argument that price volatility will subside as the market grows, becomes more valuable and has more institutional investors.”

The claims come as BTC regains its bullish strength to retest its all-time high (ATH) near $ 65,000.

Bitcoin tops $ 60,000 for the first time in five months as the U.S. Securities and Exchange Commission approves its first BTC exchange-traded fund (ETF) in years and rejects similar investment products.

ProShare’s approval of the Bitcoin Strategy ETF has raised expectations that it will make it easier for institutional investors to access the BTC market. This also helped him wipe out almost all of the losses incurred during the April-July bear cycle when BTC price doubled and climbed back above $ 60,000.

Bitcoin price cycle | Source: Pantera Capital

Is Bitcoin Undervalued?

Discussions about a target price of $ 100,000 have become more common as BTC becomes a mainstream financial stock after the first ETF.

Morehead cited the stock-to-flow (S2F) model – which examines the impact of Bitcoin’s “halving” events on price to rule out a similar bullish outlook for the cryptocurrency. He found that the first halving event reduced the rate of new BTC spending to 15% of the total outstanding supply (about 10.5 million BTC), causing Bitcoin to rally 9.212%.

The BTC supply decreases after every halving | Source: Pantera Capital

The second halving also reduced the supply of new bitcoins by a third of all BTC in circulation (15.75 million BTC). It resulted in a 2,910% bull run, almost a third of the previous one, so it had a slightly smaller impact on Bitcoin price.

Protests against BTC halving | Source: Pantera Capital

The most recent halving was recorded on May 11, 2020, further reducing the amount of new BTC relative to the circulating supply, increasing the price of BTC by more than 720% since then.

“The downside of this is that we probably won’t see 100 rallies again in a year. Logically proven cycles make BTC appear cheap to me in this phase. ”

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According to Cointelegraph

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