**The Diminishing Returns Myth Gets Crypto Backwards**
Everyone knows the narrative: each cycle delivers smaller percentage gains. 2013: 500x. 2017: 50x. 2021: 10x. Next cycle should be 2x? Underwhelming.
But this framing completely misreads what is happening. The percentage gains shrink because the base is exponentially larger. What is actually compounding is the absolute dollar value absorbed per cycle — and that number is growing by orders of magnitude.
In 2013, a 500x move required absorbing roughly $1 billion of net new demand. In 2021, a 10x move required absorbing over $500 billion. The demand sink grew 500x while the multiple shrank 50x. That is not diminishing returns — that is market-cap deepening on a historic scale.
This changes the entire framework. We are not in a decelerating regime. We are in a capital absorption regime where the same percentage move now requires 100-1000x more capital than the prior cycle. That is structural maturation, not weakness.
The implication? Stop measuring cycles in multiples and start measuring them in absolute capital flows. A 3x move from current levels requires trillions in net new inflows — comparable to gold entire annual investment demand.
$BTC at 3x today is a more impressive feat than $BTC at 50x in 2017. The market is doing something far harder.
$ETH $BNB
#Bitcoin #MarketCycle #Crypto #Investing #OnChain
Everyone knows the narrative: each cycle delivers smaller percentage gains. 2013: 500x. 2017: 50x. 2021: 10x. Next cycle should be 2x? Underwhelming.
But this framing completely misreads what is happening. The percentage gains shrink because the base is exponentially larger. What is actually compounding is the absolute dollar value absorbed per cycle — and that number is growing by orders of magnitude.
In 2013, a 500x move required absorbing roughly $1 billion of net new demand. In 2021, a 10x move required absorbing over $500 billion. The demand sink grew 500x while the multiple shrank 50x. That is not diminishing returns — that is market-cap deepening on a historic scale.
This changes the entire framework. We are not in a decelerating regime. We are in a capital absorption regime where the same percentage move now requires 100-1000x more capital than the prior cycle. That is structural maturation, not weakness.
The implication? Stop measuring cycles in multiples and start measuring them in absolute capital flows. A 3x move from current levels requires trillions in net new inflows — comparable to gold entire annual investment demand.
$BTC at 3x today is a more impressive feat than $BTC at 50x in 2017. The market is doing something far harder.
$ETH $BNB
#Bitcoin #MarketCycle #Crypto #Investing #OnChain