Emre Yumlu 
Bitcoin (BTC)’s performance over the past year has disappointed investors who anticipated a smoother trajectory following regulatory clarity and expanding institutional access. However, Adam Back — one of the early cryptographers referenced in Bitcoin’s 2008 technical paper — argues that the recent decline is consistent with historical patterns rather than evidence of a broken thesis.
The Bitcoin Four-Year Cycle and Historical Volatility
Back emphasizes that volatility has always been embedded in Bitcoin’s market structure. Previous four-year cycles have featured similar periods of price weakness at comparable stages. In his view, the roughly 26% decline over the past year reflects a cyclical correction, not a structural failure.
He suggests that some market participants may be positioning based on these well-known historical rhythms rather than reacting strictly to macroeconomic headlines. Expectations for a potential rebound later in the year, he notes, are partly shaped by these recurring patterns.
Institutional Milestones, But No Decoupling
A more crypto-friendly policy backdrop in the United States and long-awaited clarity around spot Bitcoin ETFs were widely expected to usher in a new phase of institutional participation. Many investors believed these developments would dampen volatility and help Bitcoin decouple from broader macro uncertainty.
In practice, however, Bitcoin has at times traded in line with risk assets. During the same period, gold reached fresh highs and silver climbed to multi-year peaks, attracting capital seeking protection against inflation and geopolitical tension. Rather than immediately assuming the role of a dominant hedge, Bitcoin has continued to display sensitivity to broader market sentiment.
ETF Holders vs. Retail Traders
Back also points to structural differences among investor types. ETF holders, he argues, tend to be more “sticky” compared to retail traders active on crypto exchanges. Retail participants often deploy substantial capital during rallies, leaving limited liquidity to accumulate during downturns. Institutional investors, by contrast, can rebalance portfolios more systematically.
Even so, Back believes institutional capital remains in its early stages of engagement. In his assessment, the largest pools of capital have not yet fully entered the space, despite improved regulatory conditions.
Measuring Bitcoin Against Gold
When evaluating Bitcoin’s long-term potential, Back uses gold’s total market capitalization as a reference point. He notes that Bitcoin remains approximately 10 to 15 times smaller than gold, implying significant room for expansion if it continues to gain share as a store of value.
According to Back, rapid adoption inherently brings volatility. As participation broadens across institutions, corporations, and potentially sovereign entities, price swings may moderate. However, he does not expect volatility to disappear entirely. In his view, it is not a contradiction of Bitcoin’s thesis but a natural feature of an asset still progressing along its adoption curve.
Also, you can freely share your thoughts and comments about the topic in the comment section. Additionally, please follow us on our Telegram, YouTube and Twitter channels for the latest news and updates.