Future Predictions: Will Bitcoin continue to see diminishing returns?

Quick Take

The intriguing question of whether Bitcoin will continue to experience diminishing returns is a topic of extensive discussion among cryptocurrency analysts.

A trend of diminishing percentage returns in year-over-year (YOY) price appreciation can be observed from Bitcoin’s historical performance. But will this trend persist into the future?

Looking back at Bitcoin’s past price appreciation cycles, there is a discernible pattern of declining returns. In 2011, the apex of the price appreciation reached an extraordinary 65,000%. Fast forward to late 2013, the price peaked with a YOY percentage change of over 6,000%.

Subsequently, in late 2017, Bitcoin experienced a YOY percentage change of 2,000%. The most recent bull run in 2021 demonstrated a peak percentage change of approximately 1,000%.

As of the present time, the YOY percentage change is at a significantly lower 73%. This clearly illustrates an ongoing trend of diminishing returns.

Nonetheless, history is not necessarily an accurate predictor of the future. The question remains: will the downward trend in percentage returns continue in subsequent cycles?

While past performance does give us an idea of possible trends, the inherent volatility and unpredictability of cryptocurrency markets mean that nothing is set in stone.

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