As bitcoin hovers around $4,000, a look at its previous boom and bust cycles, and thoughts about cryptoasset valuations
As the cryptoasset markets develop we'll see many booms and busts as enthusiasm waxes and wanes. Waxing and waning is all part of riding a rocket to the moon.
Context & Ripple Effects
Writing as bitcoin crosses $4,000 amid an ICO frenzy and fading Bitcoin Cash momentum, Burniske argues that boom-and-bust is not a bug in cryptoasset markets but their native rhythm — enthusiasm waxes and wanes, and valuation frameworks have to price that in rather than treat each drawdown as terminal.
The subsequent record bears the argument out: a16z's ten-year review of discussion and funding data found repeated cycles of rising activity followed by "crypto winters", the 2018 bust forced bulls to ask where money for another surge would come from, bitcoin went on to cross $67,000 in November 2021, and by February 2026 it had fallen back to $60K — down roughly half from its October 2025 peak.
First-order effects
- Bitcoin holders and ICO-era buyers watching the $4,000 level get a framework for reading the run-up as one more swing in an established cycle rather than a new-paradigm repricing.
- Burniske's valuation lens directly challenges the ICO-frenzy pricing of the moment, where token issuance is outpacing any fundamentals-based case for what the assets are worth.
Second-order effects
- When the cycle turns, as the 2018 post-mortem later showed, the binding constraint on recovery is fresh capital: money lost in the prior bust has to be replaced before the next leg up can begin.
- Each completed cycle raises the bar for the next one — the 2021 mainstream breakout drew on a far larger holder base than the 2017 retail-and-ICO wave, shifting who supplies the marginal bid.
Third-order effects
- If the pattern holds, boom-bust becomes institutionalized as crypto's market structure: analysts, funds, and eventually regulators plan around "crypto winters" as a recurring season, not an anomaly.
- Recurring cycles also keep alive the legitimacy question — every bust reopens the debate over whether cryptoassets are investable assets or speculative instruments, which is precisely the gap valuation work like this tries to close.
The trend: Cryptoassets are settling into a repeating supercycle pattern — each boom peaking higher on a broader base, each bust resetting expectations — making cycle-aware valuation the core analytical discipline of the market.