Summary The 2025 post-halving year broke historical patterns of Bitcoin. Bitcoin’s relative strength came from its role as a debasement hedge. The cycle likely peaked in 2025 and bottoms in 2026 based on historical timing. Patience is not passivity, but dominance over impulse. Looking back at the past year The year 2025 has been a disappointment for many investors with Bitcoin ( BTC-USD ) allocations, since it has been the first post-halving year, ever, to end with a negative return, albeit a small one. The previous post-halving years always had positive returns: In 2013, Bitcoin surged ~5,400%, in 2017 ~ 1,300%, and in 2021 ~ 60%, proving strong, diminishing, however, still positive returns throughout every post-halving year. 2025 was the first post-halving year to be different. Bitcoin Price (annual candles) (tradingview.com) We can combine the returns of each halving and pre-halving year of Bitcoin. The results are as follows: Bull Market years Bitcoin Price performance 2012 - 2013 ~ 17,000 % 2016 - 2017 ~ 3,100 % 2020 - 2021 ~ 550% 2024 - 2025 ~ 107 % Seasoned crypto investors know that the more preferable Bitcoin bull markets, throughout the last three cycles, relative to drawdown, occurred during halving years. The returns of Bitcoin, the mother of all Crypto Currencies, had been steadily positive, with limited downside, volatility, and drawdowns. On the other hand, the post-halving years of 2017 and 2021 had stunningly positive returns overall, but at the cost of a much worse risk to reward ratio, with elevated downside risk and volatility. The easy money had always been made in halving years. The sample size of Bitcoin cycles remains small due to the asset's limited lifetime, and one should be cautious of making conclusions about a trend. Taking the limited comparability into account, one cannot ignore that throughout previous cycles, the halving year had always been characterized as the year of rising Bitcoin dominance in par with positive Bitcoin price action. The post-halving year had been the year of falling Bitcoin dominance, in par with positive Bitcoin price action. BTC.D (blue) and BTCUSD (orange) by Author (tradingview.com) Bitcoin outperformed on a risk/reward basis in every single halving year to date, compared to the Altcoin market. During the last two post-halving years, of 2017 and 2021, Altcoins outperformed on a risk/reward basis compared to Bitcoin due to sharply falling Bitcoin dominance for a brief period of time. The feeling of real mania phase bull markets in Crypto is characterized by strongly outperforming Altcoins, coupled with a rising Bitcoin price. During these bull markets, 2017 and 2021, retail investors flock in “en masse” and create the speculative phases many Crypto traders find profitable and missed so dearly out on during 2025. Back then, new Crypto Currencies, often without any specific purpose, high centralization, and no real-world value other than being a meme, met a lot of demand, with countless new and inexperienced investors being lured into these markets. In the end, many found themselves visiting a slaughterhouse. During the post-halving year of 2025, however, Bitcoin dominance kept rising in par with negative/neutral price action for the first time in history. At the end of the year, Bitcoin dominance is still near its high for the year at ~59%. It is, to no surprise, that under such circumstances, retail investors stay on the sidelines as Bitcoin concludes what feels like the most silent bull run it has ever had. Bitcoin returned ~ 650% from the lows of late 2022 / early 2023 to the peak of the cycle in late 2025. This time was different The consensus opinion going into 2025 was that Bitcoin dominance would likely fall throughout the year, and prices would resume rising, resulting in a classic altcoin rally. This incorrect market prediction, including mine ( The Peak Of Bitcoin Dominance In 2024 ), has proven to be painfully wrong. The vast majority of Altcoins had terrible returns. Many of them peaked at similar levels of their 2021 highs, providing terrible risk/reward in comparison to Bitcoin. Data by YCharts In my opinion, the different outcome of this post-halving year regarding the underperformance of Altcoins vs. Bitcoin stems fundamentally from missing excess liquidity provision by the Federal Reserve and, therefore, all other Central Banks of the world. I believe Bitcoin and other Crypto Currencies are great hedges against the debasement of global fiat currencies. Until recently, the balance sheet of the Federal Reserve kept shrinking, while Quantitative Tightening put pressure on the economy and the financial sector. Data by YCharts During the same time, the short-end and the long-end of the bond market kept falling, i.e., yields kept rising. Making speculative liquidity less prevalent and resulting in risk-off market sentiment of the investors regarding highly volatile Crypto Assets. On the other hand, assets promising future real-world revenue, such as the AI sector, where the investment case isn’t mainly the debasement of the underlying, but the idea of future cash flows, flourished and grabbed the attention of many retail investors when there was nothing exciting left to gamble money on. The key driver of Bitcoin’s value remains that it is a ‘limited and decentralized digital something’ and therefore one of the best hedges against excessive currency debasement. In 2025, there was no major monetary debasement akin to prior post-halving years. I believe this is the main reason why the fourth Bitcoin cycle peaked in 2025, on apathy rather than euphoria. For Crypto Assets to flourish, we need reckless financial debasement. My positioning and reflection on decisions Personally, I have a passive and an active Bitcoin and Ethereum ( ETH-USD ) allocation. With my passive allocations, I gain exposure to the upside and downside volatility of the two biggest Crypto Assets, profiting asymmetrically from the ever-ongoing, gradual global currency debasement, without the risks of timing the market. With my active allocations, I try to smooth out the downside volatility along the way, as best as I can. Having any active position is fundamentally speculative. Philosophically, I regard any well-placed speculation as positively arrogant behavior because it portrays an irrationality, the art, and the courage to be willing to bet against a nearly-always winning majority of the market forces. Any active investment strategy entails childish arrogance and intolerance, of assuming that one’s own subjective view of the world is closer to the truth than the combined subjective views of everyone else. With that being said, I think I’ve done pretty well over the last couple of years. I try to intentionally buy too late and sell too early. It may be luck, for all I know. These were my buying and selling decisions throughout the last Bitcoin cycle: Positioning of Author on Bitcoin (tradingview.com) As published publicly, I initiated my accumulation period in January 2023 ( Bitcoin: Boredom Is Bullish In 2023 ), and finished the accumulation period in late October 2023. I’ve continued to sell & reactivate part of the active position after April 2024 until October 2024, which was, in retrospect, an unnecessary and therefore wrong decision. I sold my active position in late 2024 / early 2025 at ~100,000.00 US-Dollars on average ( Bitcoin: Exciting Times Are Times To Be Cautious ). Therefore, my active position didn’t take part in the later stage of the bull run, which was by design. This made me miss out on further gains of ~ 20%, however, I also avoided the subsequent selloffs in March and November of 2025. The latter one continues to this date, as Bitcoin passed the 75,000 US-Dollar mark to the downside [edit: even further after editing this article to now below 65,000 US-Dollar] What to Expect from 2026 The debasement of the monetary system has to return, in some shape or form. In the end, it’s the denominator, trending steadily towards zero, that provides the necessary tailwind for all assets to infinitely trend up into the right. The outcome is certain. Timing is the only issue when navigating an active position. Especially when it comes to highly volatile assets, such as Bitcoin and Crypto. Usually, the start of the next debasement cycle starts with a key event, such as the Corona crisis in 2020, the financial crisis in 2008, etc. A Keynesian reason to prevent further damage to the economy, a sufficient cause, being called a recession, to save the centralized monetary system once again by kicking the can even harder down the road, the urgently needed injection to keep the patient alive for a few more years to come. Economic reasons are nothing but symptoms, though wielded by human hand, and therefore hard to predict. Throughout the last three years, an uncountable amount of recessions have been predicted, in what felt like a continuous negative consensus opinion. Now, when the market forces have bond yields in a prolonged distribution phase and the Federal Reserve has stopped Quantitative Tightening via expanding their balance sheet for the first time, most recession calls have shut. Wouldn’t it be ironic for the recession to happen just now in 2026, when the “AI revolution” is about to change the concept of human productivity? Waiting for everyone to be bored The great news for us investors remains that we don’t need to predict anything. We just need the mental fortitude to willfully ignore the mass consensus, which is: every “fundamental” argument during the bear market. For me, the most effective way of accumulating within an acceptable risk levels has been to wait until the chaos ensues and the boredom has set in for most investors. Of course, the feeling of boredom is subjective and, therefore, inconsistent. Therefore, I like to couple my subjective views with some objective indicators. However, the most important signal for me remains the subjective feeling of reaching capitulation. Objective indicators to keep you interested when others are not Historically, for Bitcoin and Crypto cycles, the low occurred roughly one year after the previous peak. This simple, time-based reference point keeps me personally in check to prevent premature buying into a falling knife. The last three Bitcoin cycles peaked in December 2013, December 2017, and November 2021. The bear markets reached their lows in January 2015, December 2018, and November 2022. Why shouldn’t this cycle top in October 2025 and bottom out in October 2026, as it has always done? An initial drop that gets everybody excited, and then a slow bleed into the end of the year seems like one possible maximum pain option the market could take. Another objective indicator that I routinely look at is the MVRV Z-Score. It compares the market capitalization of Bitcoin to the realized capitalization of Bitcoin on a standard deviation score. Historically, when the score reached zero, the relative risk of a position in Bitcoin has been rather low. MVRV Z-Score of Bitcoin (www.bitcoinmagazinepro.com) 2026 will be a year where long-term, structured, and personally thought-out, simple, and humble capital allocation will be rewarded. Impatience, arrogance, short-sightedness, and impulsiveness will be punished. It looks like the markets are going to do what they always do. Man muss noch Chaos in sich haben, um einen tanzenden Stern gebären zu können - „Also sprach Zarathustra“ / Friedrich Nietzsche
