Are We in a Bitcoin Supercycle or Just Another Crypto Bubble?

Cryptocurrency markets have always been cyclical, soaring to dizzying heights before plunging in dramatic fashion.

In 2025, Bitcoin and the broader crypto market are again in the midst of a powerful rally, rekindling a perennial debate: Is this time different? Are we witnessing the start of a long-term supercycle of growth, or are current gains just another speculative bubble destined to burst? Below we dive deep into the history of crypto market cycles, the evidence for a “supercycle,” and the warning signs of a bubble, drawing on reliable data and expert insights to provide an unbiased, analytical perspective.

Understanding Crypto Market Cycles

Bitcoin, the original cryptocurrency, has followed a rough four-year boom-and-bust rhythm for much of its existence. These crypto market cycles often coincide with Bitcoin’s “halving” – a programmed event every four years that halves the supply of new bitcoins. The theory goes that reduced new supply, combined with steady or growing demand, tends to drive prices up, sparking bull markets. Historically, major price surges have followed each halving event. For example, Bitcoin saw rapid appreciation after the 2012 halving (peaking in late 2013), after the 2016 halving (peaking in late 2017), and again after the 2020 halving (peaking in late 2021). In each cycle, as prices rise, excitement builds and new investors flood in, often leading to a frenzy of speculation – and, eventually, a sharp correction or crash.

These cycles have engrained a kind of folk wisdom among crypto enthusiasts: the notion of the “four-year cycle”. Long-time observers often brace for a pattern of a roughly 1-2 year bull market followed by a multi-year bear market. The pattern has been striking. Bitcoin’s price climbed from around $13 in early 2013 to over $1,100 by December 2013, then crashed by nearly 80% in 2014. It rose from about $1,000 in early 2017 to almost $20,000 by December 2017, then plunged over 80% through 2018’s “crypto winter.” More recently, it rocketed from under $10,000 in mid-2020 to nearly $69,000 in November 2021, before once again collapsing by over 70% in 2022. This recurring boom-bust behavior – dramatic bull runs followed by brutal bear markets – is why many have likened crypto to a rollercoaster or a yo-yo. As one financial strategist wryly noted, Bitcoin “does tend to have these big falls every four years”.

Yet, despite the gut-wrenching drops, Bitcoin’s long-term trajectory has been unmistakably upward. Each bust still leaves prices far higher than the previous cycle’s lows. In fact, each successive peak has dwarfed the last: from roughly $1,100 (2013) to $20,000 (2017) to $69,000 (2021). Even the troughs have grown higher over time (the post-2013 crash low was around $200, post-2017 low about $3,200, and post-2021 low around $17,000). This ratcheting pattern has fueled a crucial observation: if these are bubbles, they are of a peculiar kind. “It’s unusual in the fact that every time it crashes, it crashes to a level that’s at least 10 times higher than where it began, and then it’s gone on to create a new all-time high,” notes seasoned investor Andrew Page, who concludes that if Bitcoin is a bubble, “it would be the biggest, most prolonged, most unusual bubble in history”.

Understanding this cyclicality is key to evaluating 2025’s rally. On one hand, crypto’s repeated boom-bust history tempers claims that any surge will be permanent. On the other, the market’s ability to recover and reach new heights after each bust suggests a gradual maturation and growing base of fundamental support. This tension underpins the supercycle-vs-bubble debate: is crypto breaking out of its violent cycle into a steadier growth trajectory, or will history rhyme once again?

Supercycle vs. Bubble: What Do We Mean?

Before diving further, it’s important to define terms. A “bubble” is a well-known concept in financial markets: it refers to a rapid run-up in asset prices to unsustainable levels, driven more by speculation and “greater fool” dynamics than by intrinsic value. Bubbles inevitably “burst,” with prices crashing back down to earth, often wiping out a lot of wealth in the process. Critics of crypto have not been shy about applying this label. Economist Nouriel Roubini famously lambasted crypto as “the mother of all bubbles”, and others have similarly called Bitcoin a Ponzi scheme or a scam with no fundamental value. In a classic bubble, the price of the asset far exceeds any rational valuation based on its utility or earnings, and continued price gains depend on ever-increasing inflows of new buyers. As one academic analysis put it: if the price of a cryptocurrency can only be explained by expecting future investors to pay even more, “that indicates a bubble, with payoffs resembling a Ponzi scheme”.

On the other side of the debate is the idea of a “supercycle.” In crypto parlance, a supercycle is an extended bull market or a permanently elevated growth plane that defies the traditional boom-bust rhythm. The term suggests that this time, the cycle is different – that due to unique factors (such as unprecedented adoption or macroeconomic conditions), the market may not experience a deep prolonged crash as in past cycles. Instead, prices could keep rising or stabilize at high levels, with only relatively smaller corrections along the way. Crypto entrepreneur Dan Held, who popularized the Bitcoin supercycle thesis in 2020-2021, described it simply as a cycle that “will be different than the ones previously” – essentially, a supersized bull run driven by a confluence of positive forces. The supercycle idea posits that crypto has reached a critical mass of adoption and relevance so that the old patterns (an explosion of interest followed by a collapse in confidence) might give way to more sustained growth. Proponents argue that massive global liquidity, mainstream institutional investment, and recognition of Bitcoin as a legitimate asset could propel it into a long “up only” phase beyond the normal 4-year cycle.

It’s important to note that “supercycle” doesn’t necessarily mean prices will never dip – even bullish analysts expect volatility. Instead, a supercycle would mean any downturns are shorter and less severe than the devastating bear markets of the past. For example, economist Alex Krüger, who believes Bitcoin entered a supercycle in the mid-2020s, suggests this would manifest as “recurrent 20%-40% corrections instead of 85% drawdowns”. In other words, pullbacks will happen, but the kind of catastrophic collapse that slices an asset’s value by half or more may be off the table if a true supercycle is underway.

The supercycle vs. bubble question essentially asks: are current high prices supported by structural, sustainable drivers (adoption, economic utility, institutional demand), or are they primarily a product of speculative fervor that will inevitably dry up? A fact-based analysis requires looking at both the historical record and the present market conditions.

A Brief History of Crypto Booms and Busts

Cryptocurrency’s short history (just over a decade) is studded with volatile cycles. Each cycle has had its own character and catalysts, but all have featured some common elements: a narrative that fuels optimism, a flood of new money (often retail investors) chasing quick gains, and eventually a reality check that brings prices back down. Understanding these past cycles provides context for evaluating whether 2025’s market feels qualitatively different or not.

• 2013: Early Bubble of Adoption Hopes. Bitcoin first grabbed global headlines in 2013 when its price spiked from under $15 at the start of the year to over $1,100 by December. This 100x surge was driven by early adopter enthusiasm and media attention. The narrative was that Bitcoin could become a revolutionary new currency outside government control – a bold, perhaps utopian idea that captured imaginations. However, the infrastructure and use cases were nascent. By early 2014, reality intervened. The largest Bitcoin exchange, Mt. Gox, collapsed amid scandal, and regulatory fears rose. The bubble burst spectacularly: Bitcoin’s price crashed by around 80% over the next year, and many other early cryptocurrencies (altcoins) also imploded. It was a classic speculative bubble. Yet notably, Bitcoin survived. By 2015 it found a bottom in the low $200s – painful for those who bought the top, but still far above its pre-2013 price. This cycle established a pattern: over-exuberance followed by a harsh correction, but not a return to zero.

• 2017: The ICO Mania and Mainstream FOMO. If 2013 was crypto’s coming-out party, 2017 was the year it went truly mainstream – for better or worse. Bitcoin, which began the year around $1,000, skyrocketed to nearly $20,000 by December 2017. Rival cryptocurrencies (Ethereum, Ripple, and hundreds of newcomers) saw even larger percentage gains. A major driver was the ICO (Initial Coin Offering) boom, where startups issued new tokens in fundraisers, often with little more than a white paper. The market was flooded with new coins promising to become the next Bitcoin or Ethereum. Retail investors worldwide, many with no prior exposure to crypto, rushed in for fear of missing out on quick riches. This was perhaps peak speculative fervor: stories abounded of taxi drivers trading crypto or people taking out loans to buy Bitcoin. By late 2017, signs of a bubble were evident as valuations far outran any actual adoption of blockchain technology. In early 2018, the euphoria flipped to panic. Regulatory warnings (like China banning ICOs and exchanges) and a realization that many ICO projects were vaporware led to a violent selloff. Bitcoin plunged over 80% from its high, bottoming around $3,200 in December 2018. Countless ICO tokens went to essentially zero. The total cryptocurrency market lost hundreds of billions of dollars in value in a matter of months. Once again, a bubble had burst.

• 2021: The Institutional and DeFi Frenzy. After a quiet build-up during 2019 and most of 2020, crypto markets roared back to life in late 2020 and 2021. Bitcoin leaped from around $10,000 in September 2020 to an all-time high of roughly $68,700 by November 2021. This time, the rally was distinguished by a wave of institutional adoption and new trends like DeFi (decentralized finance) and NFTs (non-fungible tokens). Wall Street firms and corporations began allocating to Bitcoin – famously, companies like MicroStrategy and Tesla added Bitcoin to their balance sheets, and big banks started offering crypto products. The narrative was that crypto had matured into a legitimate macro asset class, a kind of “digital gold” and the future of finance. Enthusiasts proclaimed the onset of mass adoption: everyday people were buying Bitcoin on PayPal and Cash App, and NFTs of digital art were selling for millions. By late 2021, however, excesses had built up. Leverage was high, some altcoins and meme coins (like Dogecoin) saw astronomical gains with little fundamental rationale, and the market showed hints of speculative froth. Macro-economic headwinds, such as rising inflation and the prospect of interest rate hikes, started to bite. By early 2022, crypto entered another freefall. A cascade of events turned the downturn into one of the industry’s worst-ever crashes: the failure of a major algorithmic stablecoin (TerraUSD) in May 2022 triggered a domino effect of insolvencies (hedge fund Three Arrows Capital, lenders like Celsius and Voyager, and others). In November 2022, the implosion of FTX – one of the world’s largest crypto exchanges – amid fraud allegations sent shockwaves through the market. The result was a $2 trillion wipeout of crypto asset value from the 2021 peak to the 2022 bottom. Bitcoin sank as low as ~$16,000 in late 2022, erasing nearly 75% of its value from the peak, and many once high-flying altcoins fell 90% or more. It was a sobering reminder of crypto’s volatility and the risks of speculative excess.

Despite the severity of the 2022 crash, the industry again endured. By early 2023, crypto began recovering from its “hard year”, and many argued that the shake-out was ultimately healthy – flushing out bad actors and overly risky schemes, and prompting more prudent regulation and risk management. Each cycle’s bust has culled weaker projects and forced the community to learn lessons, even as the core idea of crypto marches on. The question as of 2025 is whether those lessons, and new market dynamics, have altered the boom-bust pattern.

Embedded below is a chart known as the “Bitcoin Rainbow Price Chart,” a logarithmic chart that visualizes Bitcoin’s long-term price trajectory across multiple cycles, with colored bands indicating valuation ranges from “basically a fire sale” up to “maximum bubble territory.” Past peaks like late 2013 and late 2017 clearly pushed into the red “bubble” band, whereas the 2021 cycle peak, while high, only reached the orange “FOMO intensifies” zone. By late 2024, Bitcoin’s price was climbing again but still hovered below the red band, reflecting a possibility that this rally (so far) is more measured than the mania of 2017. This kind of data fuels the argument that the market might be maturing — but it’s also worth noting that historically, whenever Bitcoin has neared the upper bands, a cooldown followed. The rainbow chart’s creators caution it’s a fun visualization, not a crystal ball, but it provides a useful visual sense of how each cycle’s extremes compare.

Bitcoin’s “Rainbow” price chart illustrates past boom-bust cycles, with red indicating bubble territory. Notably, Bitcoin’s 2013 and 2017 peaks entered the red zone, whereas the 2021 cycle peaked lower, and the current 2024–25 rally (rightmost part of chart) has yet to reach those euphoric levels. This has led some to speculate that the market is seeing more sustainable growth rather than a blow-off top. However, as with any historical pattern, only time will tell if a new peak will eventually test those upper bounds.

History shows that every crypto bull market has eventually encountered a reality check. Intriguingly, each bull run has been accompanied by a chorus of voices claiming “this time is different” – effectively a supercycle argument – only to be proven wrong by a subsequent bear market. As a Cointelegraph analysis recounts, in every major cycle there were narratives about permanent new paradigms: in 2013-14, the idea was that global adoption as a fiat alternative would keep Bitcoin rising; in 2017-18, many believed institutional acceptance and blockchain going mainstream would prevent a crash; in 2020-21, the entrance of tech companies and hedge funds was seen as guaranteeing a floor under the market. Yet in each case, the supercycle narrative was not fulfilled – the cycle ended in a steep price crash and a prolonged bear market. A particularly dramatic example was the fate of hedge fund Three Arrows Capital (3AC) in 2021-22. 3AC’s founders, Su Zhu and Kyle Davies, had loudly promoted a “supercycle” thesis during 2021, asserting that crypto would not see a deep bear market this time and positioning their fund accordingly. When the market did turn down in 2022, 3AC’s aggressive bets imploded – the fund went bankrupt, and its collapse helped spark broader contagion that halved the crypto market’s total value. The lesson: betting one’s fortune on the assumption of a never-ending bull run can be ruinous. As Cointelegraph dryly noted, “a supercycle is a dangerous theory to bet your life savings on”.

This historical perspective keeps many analysts cautious. The burden of proof lies on the idea that this cycle will truly break the mold, given that all past “this is different” claims fell apart. However, it’s also clear that the industry’s landscape in 2025 has evolved in significant ways since prior peaks. To assess whether a supercycle might be in play, we must examine what’s happening now: the drivers of the current rally and how they compare to previous eras.

2024–2025: A New Surge Amid Changing Dynamics

As of mid-2025, cryptocurrencies are ascendant once again. Bitcoin has not only recovered from the 2022 crash but blasted to new all-time highs, breaching the symbolic $100,000 mark for the first time. In July 2025, Bitcoin traded above $120,000, and the total global crypto market capitalization hit an unprecedented $4 trillion for the first time. By some measures, the current crypto market is even larger and more integrated into mainstream finance than during the 2017 or 2021 peaks. Several factors have contributed to this resurgence – and they form the crux of the argument that maybe this cycle really is different:

• Institutional and Structural Demand: Unlike in 2017 when retail mania dominated, the 2024–25 rally has been notably fueled by institutional money and more “structure” in the market. A landmark development was the introduction of spot Bitcoin exchange-traded funds (ETFs) in major markets. By late 2024, multiple Bitcoin ETFs were launching or in the approval pipeline, including funds from some of the world’s largest asset managers. BlackRock’s iShares Bitcoin Trust (IBIT), in particular, drew enormous inflows – over $17 billion poured in within weeks of its debut – as pensions, endowments, and wealth managers finally had an easy, regulated vehicle to gain Bitcoin exposure. Rachael Lucas, an analyst at BTC Markets, observed that daily inflows into spot Bitcoin ETFs topped $1 billion at one point, and by mid-2025 the Bitcoin held by ETFs represented more than 6% of the entire ETF market’s value. “That’s not speculative froth, it’s structural demand,” Lucas said, highlighting that large investors are buying Bitcoin not for a quick flip, but to hold as part of diversified portfolios. Indeed, Bitcoin’s standing among mainstream investors has grown – even some once-skeptical institutional players have changed tune. Larry Fink, CEO of BlackRock, famously went on CNBC to admit he had been “wrong” about Bitcoin’s merits and now sees it as “digital gold” and a “legitimate… financial instrument” that can hedge against currency debasement. Such shifts in perception among Wall Street leaders signal that Bitcoin has reached a new level of acceptance.

• Mainstream Legitimacy and Political Tailwinds: Further boosting confidence is the changing political and regulatory climate, especially in the United States. The surprise re-election of Donald Trump as U.S. President in November 2024 (after a hiatus from office) proved to be a galvanizing event for crypto markets. Trump, who had once voiced skepticism about Bitcoin, reinvented himself as a crypto-friendly politician, pledging to make America “the crypto capital of the planet.” His victory – along with pro-crypto allies in Congress – immediately translated into market optimism. In fact, Bitcoin was hovering around $60,000 just before the 2024 U.S. election; in the weeks after Trump’s win, it more than doubled to six figures. Analysts attributed this to expectations of a lighter regulatory touch and supportive policies. Trump’s administration indeed wasted no time signaling a crypto-positive agenda: he indicated support for creating a U.S. Strategic Bitcoin Reserve (analogous to a gold reserve) and installed crypto-friendly officials, such as nominating a pro-bitcoin SEC Chairman to replace Gary Gensler. As one report succinctly put it, the new government’s stance turned “what had been regulatory headwinds into tailwinds” for the industry. Even traditionally cautious fund managers took notice. Shane Oliver, head of investment strategy at AMP (which oversees billions in retirement funds), said his team could “no longer ignore” Bitcoin’s rise; they took a small position in 2024 because “bitcoin was becoming part of the financial universe around us… you can’t ignore that”. Oliver still cautions that crypto needs careful risk management due to volatility, but importantly he notes that as Bitcoin “gains acceptance then it probably has a lot more upside to it” over time. In short, Bitcoin’s journey from fringe to financial mainstream seems closer than ever in 2025, aided by political legitimacy and regulatory clarity that were absent in past cycles.

• Macroeconomic Climate – Fuel for a Supercycle? The broader economic backdrop has also been favorable for Bitcoin’s narrative as a store of value. After a period of aggressive interest rate hikes in 2022 to combat inflation, central banks pivoted to a more accommodative stance by 2024 as global growth showed signs of slowing. The U.S. Federal Reserve, for instance, began cutting rates in late 2024. By December 2024, it had reduced the benchmark rate by a cumulative 100 basis points (1 percentage point) since the fall. Investors anticipate further easing through 2025. These expectations have weakened the U.S. dollar and rekindled concerns about inflation and currency debasement – conditions under which Bitcoin, with its provably limited supply, shines as an inflation hedge. “Concerns about inflation, a weakening U.S. dollar, and expectations of rate cuts by the Federal Reserve make Bitcoin’s decentralized nature more appealing than ever,” noted a Brave New Coin analysis in late 2024. Additionally, the same analysis quoted London-based macro investors observing that a global cycle of rate cuts is a supportive macro dynamic for risk assets broadly. Bitcoin’s price movements in 2025 have shown sensitivity to Fed signals: it surged past $106,000 on speculation of imminent rate cuts, then briefly dipped when the Fed struck a slightly more hawkish tone than expected. Nonetheless, the trajectory of monetary policy seems to be bending in Bitcoin’s favor compared to the tightening cycle that punctured the 2021 boom.

• Market Maturation: Lower Volatility and Deeper Liquidity? Another striking difference in the 2024-25 upswing has been the character of the market’s rise. Past bulls, especially 2017, were marked by frantic volatility and retail-driven “altcoin season” frenzies. In 2025 so far, Bitcoin’s ascent, while steep, has been somewhat more orderly and Bitcoin-focused. The Bitcoin Dominance Index – which measures Bitcoin’s share of total crypto market value – hit multi-year highs, exceeding 50% and even 60% during parts of 2025. This indicates that Bitcoin outperformed most alternative coins, a sign that speculative excess in fringe tokens was more limited than in 2017 when small-cap tokens soared indiscriminately. Large-cap coins like Ethereum have also risen, but the market hasn’t seen the same degree of exuberance in dubious micro-cap tokens or copycat projects (with some exceptions in the memecoin arena, which we’ll touch on). Greater institutional participation has likely brought deeper liquidity and somewhat dampened extreme swings. “Institutional participation and evolving regulations mean less volatility and fewer dramatic peaks and crashes. Bitcoin’s market is maturing,” observed Brave New Coin, pointing to signs like sovereign wealth funds and pension plans increasing exposure to crypto. In late 2024 when Bitcoin first crossed $100k, analysts noted that the usual retail “FOMO” was actually less intense than in 2017 – many individual investors were more cautious this time, perhaps scarred by previous busts, while institutions were methodically accumulating. This dynamic could help avoid a sudden blow-off top, instead supporting a more sustained rally. Indeed, some market observers interpreted the rally’s cadence as evidence of a supercycle-like behavior: one where dips occur but are shallower, and the uptrend resumes thanks to consistent demand. Alex Krüger, for example, asserted Bitcoin was likely in a supercycle, seeing the early 2025 pullback from ~$110k down to the $80–90k range as a healthy correction rather than the start of a prolonged bear. (By February 2025, Bitcoin did correct nearly 20% off its highs amid some profit-taking and macro jitters, but then stabilized – a far cry from the swift 50%+ meltdowns of past peaks.)

• Technological and Network Progress: While harder to quantify in price impact, the continued development of crypto infrastructure and technology also differentiates 2025 from prior cycles. Bitcoin’s network has become more efficient and functional – for instance, the Lightning Network (a layer-2 solution for faster, cheaper transactions) has grown significantly, enabling Bitcoin to be used more easily for everyday payments. This addresses the old criticism that Bitcoin is too slow or costly for small transactions. More broadly, after surviving multiple cycles, the crypto ecosystem in 2025 features more robust exchanges (those that survived or emerged post-FTX have prioritized transparency and compliance), better custody solutions for big investors, and clearer regulatory frameworks in many jurisdictions. All these elements help instill confidence that crypto is not just a wild west casino but an emerging asset class that’s here to stay. For example, countries like Germany, Thailand, and states like Texas are even proposing their own Bitcoin reserve or treasury programs, and multiple U.S. states have passed laws recognizing crypto in various legal contexts. The very notion of a U.S. Bitcoin Reserve Act (as proposed by Senator Cynthia Lummis) would have been fantasy in 2017; in 2025, it’s a real proposal gaining traction. These advancements underpin the view that the foundations of this bull market are more solid than in the past.

All of the above factors feed into the supercycle hypothesis: that maybe the crypto market has reached a level of maturity, integration, and broad support such that the old boom-bust pattern could smooth out into a longer, more sustainable growth phase. Proponents argue that while corrections will come, the floor is now higher and the likelihood of an 80% crash is much lower. As Nic Carter of Castle Island Ventures remarked, the presence of large institutional investors could indeed “limit any downturn” even if a typical cycle theory would call for a correction around 2025.

However, not everyone is convinced that the ghosts of past bubbles have been exorcised. Alongside the optimism, there remain significant warning signs and skeptical views suggesting that 2025’s boom could still be “just another bubble” following the script of history. It’s to those we now turn, before rendering a balanced verdict.

Signs of a Supercycle: Reasons This Cycle Might Be Different

Let’s first summarize the bullish indicators that suggest a supercycle – a long-lasting uptrend with only mild downturns – could be materializing:

1. Unprecedented Institutional Adoption and HODLing: In previous cycles, the marginal buyer driving prices to extremes was often a short-term speculator. In 2024–25, a larger share of demand is coming from institutions, corporations, and even governments with multi-year investment horizons. These actors are more likely to hold through volatility (or even add on dips) rather than panic-sell en masse. For instance, as of late 2024, over $36 billion had flowed into crypto through newly launched spot ETFs and similar vehicles. Public companies like MicroStrategy have amassed huge Bitcoin treasuries (over 400,000 BTC in MicroStrategy’s case) with stated intentions to hold for the long term. Sovereign wealth funds have dipped in. If some national treasuries or central banks start allocating to Bitcoin (a prospect raised by the Bitcoin Reserve Act discussions), that would represent a structural source of demand that simply didn’t exist before. This kind of “strong hands” ownership can buffer the market against the steep collapses triggered by collective fear. Indeed, investor composition has shifted: Glassnode data (often cited in industry analyses) has shown a rising proportion of Bitcoin being held in long-term addresses, and exchange balances (coins sitting on exchanges ready to trade) have trended down – suggesting more coins are in cold storage, less available for quick sale. In theory, a more illiquid supply held by committed investors could dampen any crash.

2. Fundamental Utility and Adoption Curves: Each cycle, crypto has onboarded new users and expanded its infrastructure, but critics often noted that usage hadn’t caught up with valuation. By 2025, however, the fundamental underpinnings are stronger. Payment usage, while not yet mainstream, is growing (Lightning Network capacity hit new highs). Major financial institutions are building crypto services in response to client demand, indicating genuine utility. Even the Web3 and decentralized finance segments, which were speculative in 2021, have by 2025 produced some applications with steady user bases and revenue, such as decentralized exchanges and NFT marketplaces that survived the hype phase. Worldwide, roughly 420 million people were estimated to own crypto as of 2023, and that number keeps climbing. Importantly, some developing markets now rely on Bitcoin and stablecoins for everyday transactions and remittances (e.g. in parts of Latin America, Africa, Southeast Asia), fulfilling some of crypto’s promised real-world use. If the value per coin is underpinned by a base of actual transactional and savings demand (e.g., as digital gold or as money in weaker-currency economies), it lends support to the idea that bitcoin’s price is not purely speculative. A formal model published by a researcher at the Dutch central bank (van Oordt, 2024) argued that as long as there is nonzero transactional demand for a cryptocurrency, there is a fundamental baseline value that is above zero – meaning Bitcoin isn’t a tulip-like bubble that could vanish entirely. The same study noted that prominent enthusiasts hail Bitcoin as the “flagship of a new asset class” and “digital gold”, suggesting it is increasingly viewed as having an established role. With PayPal enabling crypto for payments and countries like El Salvador using Bitcoin as legal tender (ongoing since 2021), the asset’s utility and network effects are arguably finally catching up with its price.

3. Market Resilience and Smaller Corrections So Far: Through late 2024 and 2025, the crypto market has already weathered some tests that, in prior cycles, might have triggered bigger crashes. For example, when the Fed signaled fewer rate cuts than hoped in December 2024, Bitcoin pulled back a bit (roughly 5-10%) but quickly stabilized around $100k. Similarly, news of U.S.–China tech tension in early 2025 caused a risk-off ripple that knocked Bitcoin down nearly 20% from its peak, but it found support in the high-$80ks and resumed climbing within weeks. These 20% dips are notable because in crypto terms, they amounted to healthy corrections, not crashes. Contrast this with April–July 2021, when an unfavorable tweet by Elon Musk about Bitcoin’s energy usage plus regulatory fears in China led to a 50% plunge from $60k to $30k. The difference in 2025 is that buyers seem to step in more quickly. Deep-pocketed investors appear eager to accumulate on any sign of weakness, reflecting confidence in long-term prospects. “Stop comparing this cycle to prior cycles,” urged Alex Krüger, pointing out that conditions (like a pro-crypto U.S. government) have “never been so ideal” and could make this cycle behave differently. His supercycle thesis is that we’ll see pullbacks, but likely no prolonged bear market as in 2018 or 2022. If indeed Bitcoin continues to make new highs after each mid-cycle dip, that reinforces the supercycle case.

4. Comparisons to Gold and Other Supercycles: Some analysts draw parallels to past supercycles in other assets. For example, the 1970s gold market, which Krüger references, saw gold’s price explode after the U.S. came off the gold standard – going from $35/oz in 1971 to ~$850/oz by 1980 without ever returning to prior lows. That was driven by high inflation and a shift in how gold was valued (freely traded, investment demand unleashed). Bitcoin’s advocates say a similar re-rating could be happening now: Bitcoin is increasingly seen not as a fringe tech toy but as a core alternative asset, “digitizing gold” in Larry Fink’s words. If so, Bitcoin’s value could rise an order of magnitude (some targets range from $200k to even $500k or higher in the coming years) and then plateau at a higher equilibrium rather than collapsing. The concept of a commodity supercycle – typically used to describe multi-decade secular uptrends in commodities driven by structural demand (like oil or metals during China’s 2000s boom) – has been invoked for crypto by those who believe the world is on the cusp of broad blockchain adoption. In other words, crypto could be entering its equivalent of a long secular bull market. It’s a bold claim, but not impossible if one believes, for instance, that a significant portion of global finance and transactions will migrate to crypto networks over the next decade. Under that scenario, the 2020s might be seen in hindsight as the period where crypto transitioned from a high-volatility emerging technology to a mainstream backbone of the digital economy – in which case, the valuation would be expected to rise and stay elevated, not implode.

5. Risk Management and Regulatory Clarity: Finally, improvements in the market’s structure and oversight might reduce the kind of cascade failures seen in prior busts. In 2022, part of why the downturn became so vicious was the highly leveraged positions and opaque dealings of firms like FTX, 3AC, Celsius, etc. Many of those vulnerabilities have since been flushed out or mitigated. Regulators worldwide, from the U.S. to Europe to Asia, have been busy instituting clearer rules on crypto exchanges, stablecoin reserves, and more. The result by 2025 is that reputable exchanges have better risk controls, and egregious lending practices (like uncollateralized loans that were rampant in 2021) have diminished. The fact that crypto made it through 2023–24 without major exchange failures or hacks (at least none on the order of Mt. Gox or FTX) has increased trust. Meanwhile, on the regulatory front, the passage of some sensible legislation – e.g., a Stablecoin Act in the U.S. to ensure stablecoin issuers maintain reserves, and the EU’s comprehensive MiCA regulations – gives institutional investors greater confidence to engage with crypto. With less regulatory overhang, the market may not face abrupt clampdowns that could spook investors. Instead, the focus has shifted to integrating crypto into the existing financial system under proper supervision. All this suggests a less fragile market environment.

These factors paint an encouraging picture for the supercycle argument. Indeed, as of mid-2025, one could argue that many ingredients of the perfect bullish storm are present: monetary easing, political support, mainstream buy-in, technological maturity, and an expanding user base. If there were ever a time the four-year bust might not materialize as brutally, it would be now. It’s telling that even some who previously doubted crypto are conceding its staying power. Veteran strategist Shane Oliver, while still cautious, admitted that over time, with increasing acceptance, Bitcoin “probably has a lot more upside” despite its volatility. And Andrew Page, as noted, points out that Bitcoin doesn’t neatly fit the bubble template precisely because it keeps coming back stronger after each crash.

However, prudent analysis demands examining the counter-arguments just as closely. For every bullish sign, skeptics can offer a rejoinder. Are there cracks beneath the surface of the 2025 rally? What elements of classic bubbles might still be present? In the spirit of balance, let’s explore the reasons this cycle could still turn out to be another bubble – one that may yet deflate in spectacular fashion.

Warning Signs: Why It Could Be “Just Another Bubble”

Despite the many positive developments, a number of analysts and veteran investors urge caution. They argue that, supercycle or not, the crypto market in 2025 exhibits several hallmarks of a bubble – and that ignoring historical patterns could be dangerous. Here are the key reasons for skepticism:

1. Parabolic Price Action and Speculative Fever: The magnitude of crypto’s price increase in a relatively short time is, in itself, a potential red flag. Bitcoin roughly doubled in price within a span of a few months (from around $60k pre-election to $120k by mid-2025), and the total crypto market added trillions in value. Such explosive gains often indicate a degree of speculative excess, as investors chase momentum. Veteran market strategist Sean Callow noted that Bitcoin was “moving with a lot of speculative force” as it rocketed to new highs. “That sort of price action does worry me,” he said, warning that a rapid run-up driven by speculation can just as quickly reverse. Indeed, history shows that when everyone assumes the only direction is up, the stage is set for disappointment. Even within this cycle, there are mini-bubbles visible: memecoins and fringe tokens saw euphoric pumps in early 2025 reminiscent of past manias. For example, a so-called “Memecoin Supercycle” narrative took hold, with joke tokens like PEPE or even a newly launched “TrumpCoin” surging thousands of percent purely on social media hype. An educational post by OSL noted that these memecoin frenzies rely on “social media buzz,” have little intrinsic value or utility, and create an environment “ripe for speculative bubbles”. Such episodes, albeit in a corner of the market, echo the irrational exuberance of prior peaks (like the ICO craze of 2017, or the dogecoin rally of 2021). They suggest that investor psychology – fear of missing out (FOMO) and herd behavior – is still a powerful force pushing prices beyond sustainable levels. If large numbers of participants are buying not because of fundamental conviction but simply because prices are going up, that’s a classic bubble sign.

2. Leverage and Risky Behavior Haven’t Disappeared: While the crypto industry cleaned up some leverage after 2022, it would be a mistake to think leverage is gone. New forms of leverage and high-risk trading have emerged, just more out of sight. Decentralized finance (DeFi) protocols, for instance, allow people to take leveraged positions using crypto collateral – this can be less transparent and harder to quantify than the margin trading on big exchanges. There’s also the phenomenon of crypto derivatives: Bitcoin futures, options, and perpetual swap contracts are highly liquid and can amplify volatility. In fact, open interest in Bitcoin futures reached record highs in 2025, indicating that many traders are using derivatives to bet on price movements. Sudden market swings could trigger cascading liquidations in these instruments, exacerbating a downturn (as seen in previous mini-crashes). Some skeptics argue that despite talk of “institutional money,” a sizable portion of crypto volume is still driven by short-term traders and even whales manipulating markets. A spike to $120k and back to $100k, for example, could enrich leveraged longs who sold at the top and then reloaded lower, or conversely, trap latecomers. Volatility remains extremely high relative to traditional assets, underscoring that crypto prices can overshoot in both directions. When Jim Rogers – a renowned investor who’s seen countless market cycles – calls Bitcoin “a bubble that will eventually collapse” and says “I do not see any reality to the movement”, his perspective is rooted in an instinct that parabolic charts usually end badly. Rogers cautioned in early 2025 that Bitcoin’s rise “is going to hurt a lot of people” when it reverses. Such voices urge that gravity still exists, even if defied for longer than expected.

3. Macro and Liquidity Risks Linger: The supportive macro conditions could flip again. Inflation, for instance, is notoriously unpredictable. If price pressures surge or economic data forces central banks to tighten policy instead of loosen (for example, if the Fed pauses or reverses rate cuts due to renewed inflation concerns), the appeal of Bitcoin could wane and risk assets broadly might sell off. We saw a taste of this when the Fed in late 2024 was less dovish than hoped, which immediately knocked Bitcoin down a few percent. If by late 2025 inflation is still above targets, central bankers may turn hawkish, removing the punch bowl that’s helped fuel this rally. Additionally, liquidity from other sources could dry up: one must consider that 2020-2021’s bull run was significantly aided by massive fiscal stimulus and money supply growth (the “money printer go brrr” phenomenon Dan Held cited as a key supercycle factor). In 2025, we’re not in a pandemic stimulus environment; however, global liquidity has been rising partly due to China’s monetary easing and other factors. Should those dynamics change – say, if major economies decide to clamp down on excess liquidity or address asset bubbles – crypto could be directly impacted. Simply put, the crypto market still dances to the tune of global liquidity to a large extent. Any shock – a geopolitical crisis, a credit event in traditional markets, or even an internal crypto scare – could puncture confidence. It’s worth remembering that market sentiment can reverse faster than fundamentals. A speculative asset can fall 50% in a matter of weeks regardless of whether long-term fundamentals remain intact, purely because of a shift in mood or risk appetite. The bubble scenario is that something triggers a rush for the exits, and with so much paper wealth accumulated in a short time, that rush turns into an avalanche of selling.

4. Recurring Narrative of “This Time Is Different”: As discussed earlier, every cycle has its rationalizations for why previous boom-bust patterns no longer apply. Seasoned traders often view the phrase “this time it’s different” as among the most expensive words in finance. The supercycle thesis, in their eyes, might just be the 2024-2025 version of that perennial optimism. The Cointelegraph analysis noted, almost wryly, that the concept of “this cycle being different” has surfaced in every past bull market – and each time, it was proven wrong when a bear market followed. That track record suggests skepticism is warranted toward the latest supercycle claims as well. Perhaps the names and details change – today it’s “ETFs and nation-state adoption” instead of “ICOs and institutional adoption” – but the end result could still be a bubble popping once the narrative exhausts itself. The fact that people like Su Zhu (of 3AC) and others got it so wrong in 2021 is a humbling reminder that even insiders drinking the Kool-Aid can misjudge market gravity. Now in 2025, we hear prominent figures saying similar things about endless growth. Certainly, conditions differ, but human nature in markets doesn’t. Greed and fear cycle eternally.

Skeptics also point to valuation concerns. While valuing crypto is tricky, one approach is to compare its market cap to the scale of problems it aims to solve or the adoption level. A $4 trillion market cap for crypto in 2025 begs the question: is the crypto economy, in terms of actual usage, anywhere near justifying that? For context, $4 trillion is roughly the size of Germany’s stock market or the GDP of a large country. Are crypto networks producing equivalent economic value? Some would argue not yet – much of that valuation is anticipatory. If that anticipated adoption or profit fails to materialize soon enough, valuations could be hit. Price-to-usage metrics (like market cap per active user or per transaction) are at very high levels for many cryptocurrencies, implying lofty expectations for future growth. That’s not inherently bad in a growth sector, but it is reminiscent of the dot-com bubble metrics, where companies were valued enormously relative to current users or revenues, under the assumption of eventual world-changing success. Many of those companies crashed when the growth outlook got adjusted to reality.

5. External and Regulatory Threats: While the regulatory environment is better than before, it’s not without risks. The U.S. crypto-friendly pivot could be reversed by a change in administration down the line or even by current policymakers if something goes awry (e.g., if a stablecoin implosion or major crypto-related fraud occurred, there could be public and political backlash). Globally, there are still major powers like China and India that maintain a hardline stance against unfettered crypto usage. Any severe action – like stricter enforcement on remaining offshore exchanges, or higher taxes on crypto gains (some countries have floated windfall taxes on crypto profits) – could puncture enthusiasm. Furthermore, one should consider technological risks: crypto is still a relatively young tech. What if a critical vulnerability or hack (beyond routine) occurred on a major blockchain? Or, looking further out, what if advances like quantum computing threaten cryptographic security? These are long-tail risks but feed into the uncertainty that typically keeps an asset from attaining “risk-free” status. In a bubble, such risks are often ignored by investors – until suddenly they aren’t, and everyone rushes to re-price the risk.

6. The Wider Crypto Ecosystem’s Health: Bitcoin might be the star, but the crypto market’s stability also depends on key infrastructure and the health of other segments. The 2022 crisis taught us that even if Bitcoin itself chugs along, problems in crypto banks (lenders), exchanges, or stablecoins can drag the whole market down. In 2025, are we sure that, say, all stablecoins are fully stable? Tether (USDT), the largest stablecoin, remains somewhat opaque in its reserves, though it has operated without serious issue so far; any wobble there could cause panic due to Tether’s ubiquitous role in trading. DeFi protocols are another concern – they are still experimental and can be subject to exploits. A failure or loss of funds in a major DeFi platform could dent confidence broadly. And let’s not forget that altcoins beyond Bitcoin and Ethereum remain highly speculative. Many new tokens launched in 2023–25, especially in areas like metaverse or meme coins, could well approach near-zero if a downturn happens, just as thousands of ICO tokens did after 2018. If enough retail investors get burned on those, it could sour sentiment even on blue chips like Bitcoin, as happened before.

Bringing these points together, the bearish view is essentially: Yes, the scenery changes, but the boom-bust cycle remains entrenched. The bigger they rise, the harder they fall. Every bubble has fundamental arguments that seem compelling (e.g., “the internet will revolutionize business” was true, yet dot-com stocks still crashed 90% in 2000 because they got ahead of themselves). Crypto’s transformative potential can be real, and still its market could overinflate and correct severely.

Sean Callow, the FX analyst, encapsulated this balanced skepticism by acknowledging Bitcoin is on “sounder footing” now with diverse investors which “potentially limit the downside,” but “no doubt, if the price starts falling it could get very ugly”. In other words, improvements in the market may soften the blow, but won’t prevent a rout if a bubble does burst. It’s also possible that even staunch crypto believers expect a big correction as part of the game – they just think it will eventually recover. For example, some traders openly talk about taking profits at cycle highs and buying back in after a 50% drop, treating it as almost a given. If enough market participants operate this way, it can become a self-fulfilling cycle: when valuations feel stretched or a certain date nears (like late 2025, roughly a year after the halving, which some anticipate as a top based on the 4-year rhythm), many will start selling, creating the very correction they expect. That dynamic could replay unless or until proven otherwise.

Lastly, the psychological factor cannot be understated. Crypto markets are heavily sentiment-driven. At $120k Bitcoin, a lot of optimism (and leverage) is arguably already priced in. If the majority of investors are bullish, the contrarian in traditional analysis would caution that the market might be ripe for a turn. And conversely, a true supercycle might only be evident in hindsight – it would mean climbing a “wall of worry,” not universal bullishness. So, seeing a robust debate (as we are doing here) is healthy. But if at any point you notice media and analysts in near-unison proclaiming a supercycle and dismissing the possibility of a crash, that could itself be a warning that euphoria is overtaking reason.

Conclusion: Supercycle or Bubble? A Bit of Both

Standing here in late 2025, with Bitcoin and crypto assets reaching heights once unimaginable, it’s clear that cryptocurrency has undergone an extraordinary journey. The question “supercycle or bubble?” doesn’t have a simple yes-or-no answer – and in fact, the evidence suggests elements of both. The current cycle has features that differentiate it from past booms, hinting at a market that is gradually maturing. At the same time, the DNA of volatility and speculative excess is very much alive in crypto, meaning sharp downturns cannot be ruled out.

On the supercycle side of the ledger, we have compelling signs of secular adoption and integration into the global financial fabric. Bitcoin’s recognition as a legitimate asset by major institutions (from BlackRock to nation-states) provides a foundation that simply didn’t exist in 2017 or even 2021. Structural demand – long-term holders, ETFs, corporate treasuries – is stronger than ever. The industry’s infrastructure is more robust, and regulatory clarity has improved in key markets, reducing some tail risks. There’s a real argument to be made that crypto is too intertwined with the broader economy now to “go to zero” or vanish in a puff of tulips. Even skeptics like Dr. Shane Oliver concede that over time, as acceptance grows, crypto’s trajectory points upward despite interim jolts. And indeed, each cycle’s lows have been higher than the last, suggesting a stair-step pattern of growing global value attribution to crypto assets. It’s conceivable that the infamous 80% drawdowns of the past may moderate to, say, 30-50% pullbacks – painful, yes, but not catastrophic for long-term believers. This would align with the “recurrent corrections, no deep winter” scenario that supercycle proponents envision.

Yet, on the bubble side of the ledger, history’s echoes are loud. Every surge of this magnitude in any asset has eventually faced a reality check. Crypto’s culture still has a strong speculative streak – from meme coin crazes to leverage-fueled bets – which means the market can outrun itself. As much as things change, the core driver of bubbles is human psychology, and that hasn’t changed. Greed can flip to fear swiftly, and crypto’s high volatility means the unwinding, if it comes, can be violent. When veteran investors like Jim Rogers or economists like Nouriel Roubini look at Bitcoin’s meteoric rise, they see classic bubble behavior and warn that a day of reckoning awaits. It would be unwise to dismiss these warnings out of hand – after all, they’ve been right during previous busts, even if Bitcoin later recovered.

In many ways, crypto in 2025 might be straddling a transition: evolving from a purely speculative niche into a more established asset class, but not quite there yet. This means we could continue to see bubble-like cycles, but perhaps their character will shift. Maybe the crashes won’t be as deep, and maybe the baseline value will keep rising, reflecting growing adoption. In other words, one could argue that crypto has been experiencing a series of bubbles that nonetheless form part of a long-term supercycle of growth. Each bubble, when it bursts, has left the industry not in ruins, but rather at a higher plateau from which the next growth phase begins. Andrew Page’s observation encapsulates this well: “So it might be a bubble. But it would be the biggest, most prolonged, most unusual bubble in history”. Crypto might be a continual bubble that refuses to pop for good – deflating and re-inflating as it climbs the adoption curve.

For the average crypto investor or enthusiast reading this in 2025, what does this all mean? Firstly, it’s a reminder to stay level-headed. Unbiased analysis demands acknowledging both the transformative potential and the speculative dangers. Yes, we may be witnessing something unprecedented – perhaps a global financial paradigm shift – but that doesn’t confer immunity to market cycles. Tempering expectations is wise: hope for a supercycle, plan for a bubble. That means diversifying, managing risk, and not over-leveraging on the assumption that prices only go up.

Secondly, understand that in a sense, declaring victory or defeat on the supercycle question might be premature. If the market continues upward for an unusually long period (say, no major crash for five or more years), then in hindsight we’d say a supercycle was in effect. If a brutal bear market strikes in 2026, then this was “just another cycle” after all. At the moment, we are in the middle of the story, and “only time will tell” is more than a cliché here – it’s fact. As Brave New Coin aptly put it after analyzing the bullish rainbow chart scenario: the pattern might play out, but only time will tell. In investing and markets, humility in the face of uncertainty is a virtue.

In conclusion, the crypto market of 2025 stands at a crossroads of optimism and caution. It has matured impressively, battling its way into the portfolios of the global elite and the halls of power, suggesting a bright and perhaps more stable future. Yet, it also remains a young, sentiment-driven market where booms and busts are part of the DNA. Whether we are in a supercycle or a bubble is not an either/or verdict so much as a spectrum – and crypto might well occupy a middle ground. It’s a unique asset class that behaves like a bubble in the short term but has behaved like a revolutionary technology adoption story in the long term. As investors, journalists, and enthusiasts debate this very question, one thing is certain: crypto will continue to surprise us all. As the old saying (slightly adapted) goes, markets tend to do what hurts the most people. If most expect a bubble to burst, maybe the supercycle roars on longer than thought; if most buy into the supercycle narrative blindly, perhaps a harsh lesson awaits. The prudent path lies in staying informed, paying attention to the data (not just the hype), and preparing for multiple outcomes.

Crypto’s 2025 edition cycle is writing itself into history books either way. Supercycle or not, it has already defied many expectations – and in doing so, has solidified its place in the financial world. Bubble or no bubble, crypto is still here. The coming years will reveal the next twist in this remarkable story. For now, eyes are on the market’s next move: will it maintain altitude and prove the supercycle believers right, or will gravity remind us that what goes up fast can come down just as fast? The only honest answer: stay tuned, stay prudent, and don’t forget to buckle up. In crypto, the one cycle that’s guaranteed is the cycle of learning. Each turn of the market teaches new lessons – and 2025 is giving us a masterclass in both exuberance and caution.