Bitcoin's Four-Year Growth Rate Drops to 8%

Bitcoin’s four-year compound annual growth rate (CAGR) has reached an all-time low of 8%, according to data from Glassnode. This period was selected to align with Bitcoin’s halving cycle and the typical bull/bear market cycle, which usually spans a similar duration. In March 2021, Bitcoin was trading around $60,000, near the peak of the previous market cycle. The decline in CAGR is expected as Bitcoin’s volatility and returns diminish over time as the asset matures.

However, this metric is highly dependent on the reference points. In 2021, Bitcoin was experiencing a blow-off top early in the cycle, whereas in March 2025, $80,000 could be marking a cycle bottom. The ethereum (ETH)-to-bitcoin (ETH/BTC) ratio has now entered negative CAGR territory at 6%, reflecting ethereum’s underperformance relative to bitcoin. This decline is primarily due to ethereum’s price remaining essentially flat since February 2021, which is now below $2,000. Currently, the ETH/BTC ratio stands at 0.024, marking its lowest level since late 2020.

This significant drop in Bitcoin’s CAGR to 8% is a notable development, as it represents the first time the four-year CAGR has fallen below 10%. This decline suggests that the cryptocurrency market may be experiencing a period of consolidation or correction, following years of rapid growth. Despite this, Bitcoin's investment potential remains robust, as evidenced by the profitability of certain institutional investments. For instance, Strategy's Bitcoin investment, despite recording its largest weekly decline in history on March 10, remains profitable by 18.9%.

The reasons behind this slowdown in growth could be multifaceted. One potential factor is the increasing regulatory scrutiny and market maturity, which may be tempering the speculative fervor that once drove Bitcoin's exponential growth. Additionally, the entry of institutional investors and the development of Bitcoin exchange-traded funds (ETFs) could be contributing to a more stable and less volatile market environment. These ETFs, which allow for easier and more regulated access to Bitcoin, may be reshaping the investment landscape and attracting a broader range of investors.

The decline in Bitcoin's CAGR also raises questions about the future trajectory of the cryptocurrency market. While the long-term outlook for Bitcoin remains positive, with some analysts predicting a path to a $1,000,000 valuation driven by global mining wars and nation-state accumulation, the near-term prospects are less clear. Investors and analysts will be closely monitoring the market for signs of a rebound or further consolidation, as the cryptocurrency continues to navigate the complexities of a maturing market.

In conclusion, the drop in Bitcoin's four-year CAGR to 8% is a significant development that reflects the evolving dynamics of the cryptocurrency market. While this decline may signal a period of consolidation, it also underscores the resilience and long-term potential of Bitcoin as an investment asset. As the market continues to mature, investors will need to adapt to new realities and opportunities, ensuring that their strategies remain aligned with the changing landscape of digital currencies.