Fidelity Thinks Bitcoin May Be Leaving Its 80% Crashes Behind
Fidelity Digital Assets argues Bitcoin’s market construction has shifted sufficient that the acquainted four-year boom-bust sample and the brutal 80% drawdowns that usually adopted, could not be the default consequence.
In a Feb. 24 analysis notice titled “Is Bitcoin’s Four-Year Cycle Over?” analysis analyst Zack Wainwright frames the decision round a easy commentary: Bitcoin is now a really different-sized asset with a really totally different purchaser base. Fidelity pegs Bitcoin’s market cap at an all-time high of roughly $2.5 trillion as of October 2025, alongside indicators of deeper liquidity and a steadier volatility regime than prior cycles.
“As bitcoin matures, worth habits is diverging from earlier cycles. Volatility reducing whilst worth reached new highs above $126,000.”
Bitcoin Demand Is Being Re-Shaped
Fidelity’s volatility argument leans on one-year realized volatility and the way it behaved round cycle peaks. In prior cycles, the sample was broadly constant: volatility would compress into new lows forward of a significant upside transfer towards new highs, then broaden because the cycle overheated.
This time, Fidelity says the compression is arriving sooner after the height. The notice factors to 17 new all-time lows in one-year realized volatility logged in January 2026—simply months after Bitcoin notched contemporary all-time highs in October 2025—calling it a significant divergence from the cadence of earlier cycles. The group attributes a part of that dampening to scale: Bitcoin is about twice the market cap it was on the 2021 peak, roughly 10x 2017’s peak, and over 200x 2013’s.
The second pillar is who’s holding provide, and the way sticky that demand seems. Fidelity highlights a cohort of 49 public corporations holding greater than 1,000 BTC every, with mixed holdings above 1 million BTC, over 5% of circulating provide. It additionally notes that, since Q1 2020, this group elevated holdings quarter-over-quarter in each quarter besides Q2 2022, when Tesla offered a big portion of its place.
On the ETF aspect, Fidelity writes that US spot Bitcoin ETFs launched in January 2024 and collectively held almost 1.3 million BTC as of Jan. 30, 2026, about 6.4% of circulating provide. The notice provides that the class chief surpassed $75 billion in property underneath administration in underneath two years, contrasting that tempo with gold’s flagship ETF, GLD, which took almost seven years to achieve the identical milestone.
Together, Fidelity says public corporations and ETFs now maintain almost 12% of circulating provide, with many of the development coming after 2023—a requirement shift the group views as structurally essential for drawdowns.
Fidelity additionally argues the cycle has seemed “notably secure” throughout a number of on-chain and issuance-linked measures. Using a profit-window framework, when addresses in revenue first exceed 95% via the final time they continue to be above 95%, the notice says MVRV has stayed roughly round two instances realized worth via many of the bull market, fairly than spiking towards four-to-six instances as in earlier cycles.
The report flags a counterfactual as an example the purpose: if market cap reached 4 instances realized cap on this cycle, it might indicate roughly a $4.5 trillion market cap and about $225,000 per BTC as of Feb. 2, 2026. It additionally notes the Puell Multiple has stayed shut to at least one, signaling day by day issuance worth hasn’t meaningfully deviated from its one-year common.
Fidelity’s new “Profit to Volatility Ratio” is the place the drawdown declare turns into express. The group units 0.01 as a stability line and says the ratio has stayed above 0.015 since late 2023, the longest sustained interval at these ranges in Bitcoin’s historical past. Even with a February 2026 downturn that pushed BTC under $70,000, the ratio remained above the brink.
“A measurement above 0.01 might be thought of very secure. Conversely, a measurement under 0.01 must be considered with warning.”
The implication, Fidelity suggests, will not be that volatility disappears—however that the traditional cycle-ending wipeouts could also be much less probably in a market more and more formed by institutional channels and a bigger, extra liquid base. If that regime holds, the following section might look much less like a blow-off prime and extra like a slower, extra methodical repricing, increased over time, however with fewer cliff-edge resets.
At press time, BTC traded at $66,677.