Why this BTC cycle is broken: 5 reasons

The cyclical nature of Bitcoin (BTC) has been the subject of much discussion and analysis. The 4-year cycle dictated by the BTC halving event seems to be the dominant narrative in the cryptocurrency sector.

Especially since historical price action and investor sentiment tend to follow a pattern: 2 years up, 1 year down and 1 year accumulation.

However, while recognizing the importance of fitting history and the fundamental importance of halving the series, some commentators are trying to highlight the differences.

The latest calculation that makes the current Bitcoin and other cryptocurrencies different from their predecessors is provided by X by @caprioleio. In the article below, we present the unique aspects of this cycle and its unprecedented events:

Hash rate breaks all-time high (ATH) during bear market Long-term hodeler (LTH) supply hits record high of 76.2% BTC lightning network hits $150 million in governments in multiple countries BTC adoption reaches unprecedented levels, and counting A growing number of companies accept cryptocurrency payments.

Bitcoin hash rate continuously breaks ATH during bear market.

The first phenomenon @caprioleio pointed out is Bitcoin's hash rate. This basic network indicator estimates the number of hashes per second mined by network miners. The higher the price it represents, basically the stronger and more secure the network is, and the more computing power is involved in mining BTC.

According to a chart the analyst published in another post on X, Bitcoin's hash rate is “crazy right now.” Compare current prices as BTC struggles at the $30,000 level, with hash rate readings at an all-time high of $69,000 in November 2021.

Today, the hashrate is about 3x what it was when the Bitcoin network reached its ATH.

The analyst often finds that the hash rate decreases or increases slowly during bear markets. Currently, the growth of Bitcoin's network power is enormous. He concludes:

“This is a step towards the industrialization of mining. Energy companies and governments are here.

The supply in the hands of LTH reaches ATH

The second reason this Bitcoin cycle is unique is the belief and behavior of long-term hodelers (LTH). In a separate post, @caprioleio pointed out that this important indicator on the chain hit a historic all-time high in mid-2015.

During the bear market 2 cycles ago, the supply on hand for LTH was around 75%.

This record was broken, with long-term holders holding up to 76.2% of the BTC supply in circulation. This reflects unprecedented confidence in Bitcoin's potential for further growth and the long-term outlook of most market participants. The analyst added:

“Lack of liquidity means the same people are bidding in smaller coins. You do the math.

Governments of many countries are mining BTC.

Another argument concerns Bitcoin mining by government institutions in many countries. Indeed, this revolution was not in previous market cycles, when the burden of mining rested on the shoulders of private institutions or individual mines.

The entry of government institutions into the Bitcoin and cryptocurrency mining market is not just about multiplying the potential money. It will also help legitimize cryptocurrency mining as a viable and legitimate business upon which states can base their long-term economic and financial strategies.

Here are some examples of countries where governments are involved in Bitcoin mining.

El Salvador: Following the adoption of Bitcoin as legal tender in El Salvador, the government has announced its intention to start BTC mining operations, including using volcanic power. Iran: The government of Iran has authorized cryptocurrency mining and can participate in this activity in a number of ways, including through mining companies. Venezuela: The government of Venezuela has openly invested in the issue of the petro-cryptocurrency created and supported by the government of Venezuela. Russia: There are reports that Russian government institutions are involved in cryptocurrency mining. Kazakhstan: The government of Kazakhstan is known to support the development of blockchain technology and cryptocurrencies, including mining. Bhutan: The tiny Bhutanese government owns and mines BTC. According to recent reports, the country may account for 1 percent of the network's total computing power.

The lightning network reached more than 150 million dollars

The growth of the Lightning Network (LN) or Bitcoin Network Layer 2 in recent years has been impressive. BeInCrypto reports that LN transactions have increased more than 1,200% in the past two years.

Moreover, this development came despite a bear market and a deep 77% drop in the price of Bitcoin, counting the macro down from the ATH of the current cycle.

At the same time, @caprioleio points out that the value of assets locked in LN has reached $150 million today. These are peaks that have not been noticed before.

Also, looking at on-chain data and LN capacity, we see that it peaked in Q2 2023, but after a slight correction, it has returned to record levels today.

Moreover, the chart clearly shows that the decline in the price of Bitcoin in 2022 bear market (red and green arrows) is reversed with the increase of LN capacity.

BTC adoption has reached unprecedented heights

Finally, the last reason mentioned by the analyst why this Bitcoin cycle is different from the others is the global acceptance of cryptocurrencies. @caprioleio The McDonald's example of a burger can be bought with BTC, but there are many more cases like this.

During the bull market of the previous cycle, Elon Musk's Tesla, which started accepting BTC as payment for its cars, remains the perfect example.

However, over time – and under the pretext of caring for the environment – the company discontinued this option. Still, this world's largest corporation has paved the way for other companies that are opening up to virtual currencies today.

Here are some examples of industries and companies accepting payments in BTC today.

Online Retail: Some online stores and marketplaces accept payment in Bitcoin. Examples include Overstock, Shopify (a payment gateway), and various online stores specializing in hardware, electronics, and clothing. Gaming and Entertainment: The gaming industry and entertainment platforms offer Bitcoin payment options. Examples include Microsoft (with its Xbox service), Steam, and various online games. Travel and Reservations: Some companies in the travel industry accept payment in Bitcoin for airline tickets, hotel reservations, and other travel-related services. Hosting and Technology Services: Providers, VPN providers, and hardware service companies allow payment in Bitcoin. Restaurants and Dining Areas: Although not common, some restaurants and bars accept payment in Bitcoin. Financial Services: Some companies in the financial sector, such as some currency exchange offices, offer the ability to buy or sell Bitcoins. Online Education: Platforms that offer online courses may allow payment in Bitcoin for access to educational materials.

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