charts.bitbo.io

Both the (4th) Rainbow Chart and Power Law chart failed this week. Only the Diminishing Returns theory has survived every cycle. As of this week, both the [Bitcoin Power Law chart](https://charts.bitbo.io/long-term-power-law/) and the [Bitcoin Rainbow chart](https://www.blockchaincenter.net/bitcoin-rainbow-chart/) (now on its 5th version) have broken through the bottom. Both of them have always grossly overestimated BTC price and underestimated the **diminishing returns** of each cycle. ####**Bitcoin cycles have diminishing returns** * Cycle 2: 50x gain * Cycle 3: 20x gain * Cycle 4: 3x gain * **Cycle 5 (just ended): 2x gain (1.7x inflation-adjusted)** ####**Returns converted to 4-year CAGR**: * Cycle 2: 170% * Cycle 3: 110% * Cycle 4: 32% * **Cycle 5 (just ended): 19% (14% inflation-adjusted)** The current Cycle 6 will likely only have 1.4x to 1.6x, which is roughly 9-12% CAGR. Beyond that, BTC price returns are no better than S&P 500 returns, but with much more risk. Within a couple of cycles, not only will the S&P 500 have less risk than holding BTC, but the S&P 500 will also have higher returns than holding BTC. A lot of crypto investors are going to leave. So if you think THIS bear market sucks, good luck surviving the next 2 cycles. It's going to be worse. Saylor designed STRC expecting 30% CAGR for Bitcoin. I hope he's ready for far, far lower returns. (There is one silver-lining: This diminishing returns analysis is based on cycle **highs**. The cycle **lows** for this cycle are still around 30% CAGR as of the start of June 2026, but that's likely because the cycle isn't over yet and we haven't hit the bottom. If BTC falls to $30-40k before the end of this cycle, then the returns will be just as bad as the cycle high predictions.)