Fidelity Digital Assets argues that the structure of the Bitcoin market has changed enough that the typical four-year boom-bust pattern and the 80% crash that often follows, may no longer be the default.
In a February 24 research note titled “Is Bitcoin’s Four-Year Cycle Over?” research analyst Zack Wainwright puts the call in a simple observation: Bitcoin is now a very different-sized commodity with a very different consumer base. Fidelity pegs the Bitcoin market cap at an all-time high of around 2.5 trillion by October 2025, with signs of deeper liquidity and stronger volatility than in previous cycles.
“As bitcoin is growing, price behavior is different from previous cycles. Volatility is decreasing as the price has peaked above $126,000.”
The demand for Bitcoin is being reshaped
Fidelity’s volatility argument relies on observed one-year volatility and how it behaved near cyclical peaks. In previous cycles, the pattern was broadly consistent: volatility would compress to lows before a sharp rise to new highs, then widen as the cycle overheated.
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In this case, Fidelity says the compression will come soon after the peak. The note points to the 17 new lows in the one-year volatility found in January 2026—a few months after Bitcoin hit a new all-time high in October 2025—which calls it a logical departure from the cycle of previous cycles. The team attributes part of that decline to scale: Bitcoin is almost double the market cap it was in 2021, roughly 10x 2017’s peak, and more than 200x 2013’s.
The second pillar is who owns the property, and how tight that need seems to be. Fidelity highlights a group of 49 public companies holding more than 1,000 BTC each, with combined assets of more than 1 million BTC, more than 5% of the circulating supply. It also notes that, since Q1 2020, the group has increased its value quarter over quarter in every quarter except Q2 2022, when Tesla sold most of its position.
On the ETF side, Fidelity notes that US spot Bitcoin ETFs launched in January 2024 and collectively held about 1.3 million BTC as of Jan. 30, 2026, approximately 6.4% of the circulating supply. The note added that the sector leader exceeded $75 billion in assets under management in less than two years, comparing that pace to the gold ETF, GLD, which took nearly seven years to reach the same milestone.
Together, Fidelity says public companies and ETFs now hold about 12% of circulating supply, with most of the growth coming after 2023—a shift in demand that the group considers structurally important to mitigate.
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Fidelity also says the cycle looks “remarkably stable” across most of the measures linked to the release. Using the framework of the profit window, when the profit addresses start to exceed 95% in the last time it stays above 95%, the note says that the MVRV has remained about two times the value at which most of the bull market was found, rather than four to six times as in previous cycles.
The report raises a false flag to illustrate this point: if the market quadruples in this cycle, it will mean a market cap of around $4.5 trillion and around $225,000 per BTC as of Feb. 2, 2026. It also notes that the Puell Multiple has remained close to one, indicating its daily average means a reduced amount of daily emissions.
Fidelity’s new “Profit to Volatility Ratio” is where the discount claim becomes clear. The team puts 0.01 as a stability line and says that the rate has remained above 0.015 since late 2023, the longest continuous period at those levels in Bitcoin history. Even with the February 2026 decline that pushed BTC below $70,000, the rate remained above the limit.
“A ratio above 0.01 can be considered very stable. Conversely, a ratio below 0.01 should be viewed with caution.”
The point, Fidelity suggests, is not that volatility is disappearing—but that the end-of-cycle shutdown of the past may be less likely for the market to be shaped by institutional channels and a larger, more liquid base. If that regime holds, the next phase could look less like a peak and more like a slow, systematic recovery, peaking over time, but with a few cliff-edge resets.
At press time, BTC traded at $66,677.
The featured image was created with DALL.E, a chart from TradingView.com
