Bitcoin has reduced its decline from the cycle high to about 50 percent this cycle, an analysis said, as it gradually sheds its image as an asset prone to crashes. With volatility easing, the market’s focus is also shifting from whether it can exist to how much it should weigh in a portfolio.

CoinDesk reported on Tuesday that bitcoin has repeatedly plunged 80 to 90 percent from peak levels in past cycles, but the drawdown has been cut roughly in half this cycle, signalling a change in market structure. The trend suggests more than a simple price move and points to a shift in the asset’s character itself.

Jack Wainwright (잭 웨인라이트), an analyst at Fidelity Digital Assets, wrote on X, formerly Twitter, that as bitcoin matures, rallies are becoming less impulsive and the likelihood of extreme downside events is declining. He cited the fact that the current pullback is more limited than in the past when measured against the record high of about $126,200 set in October 2025. He said both gains and losses are becoming less extreme in each cycle.

The market points to expanding liquidity and rising institutional participation as drivers of the change. Jason Fernandes (제이슨 페르난데스), co-founder of AdLunam, said a drawdown compressed to about 50 percent is a sign the market is entering a mature phase. He said as liquidity deepens and institutional funds flow in, volatility naturally declines on both the upside and downside.

Fernandes also stressed that the market narrative is changing. He said debate used to centre on bitcoin’s legitimacy, but it has now moved to figuring out the optimal portfolio weighting. Some institutional investors are focusing on the view that adding bitcoin at about 1 to 3 percent of total assets can improve returns and risk-adjusted performance, measured by the Sharpe ratio.

Still, optimism is not the only view. Mike McGlone (마이크 맥글론) of Bloomberg Intelligence raised the possibility of bitcoin reverting to around $10,000. He warned that the crypto bubble may already have peaked, and that a future correction could emerge alongside other risk assets such as stocks and commodities.

Fernandes countered that argument by citing economies of scale. He said that as bitcoin has grown into a major asset class, it would take far more capital to produce a 90 percent crash like those seen in the past. He stressed that in a market linked to institutional money, ETFs and pension funds, large-scale liquidations have become much harder than before.

The shift can also be seen in performance metrics, the assessment said. A recent Fidelity study found bitcoin posted returns of about 20,000 percent over the past 10 years, far outpacing major asset classes such as stocks, gold and bonds. Despite its volatility, it has remained competitive on a risk-adjusted basis and was tallied as the highest-returning asset in 11 of the past 15 years.

Market maturity can also mean lower returns. Fernandes said that as volatility declines, returns will gradually normalise, and the extreme surges seen in the market’s early days may be harder to repeat. He added that bitcoin is now positioning itself not as a venture-style bet but as a pillar of macro asset allocation.