By Shaurya Malwa

Bitcoin returns far less for every dollar of new money entering it than it did in its early years, a decline in capital efficiency that has grown sharper as the asset has scaled.

Analytics firm CryptoQuant measured how much fresh capital each bitcoin bull cycle attracted relative to the price gains it produced. In the 2011 cycle, about $2.8 billion in net inflows drove a rally of roughly 55,000%.

The 2015 cycle took about $69 billion, yielding a gain of nearly 10,000%. The 2018 cycle needed about $365 billion for roughly 2,000%. This cycle, running since 2022, has taken in about $697 billion and returned 689%. The figures track realized capitalization, a measure that values each coin at its last traded price rather than its current price, a rough gauge of how much money has actually gone into the asset.

That view lands at an awkward moment. U.S. spot bitcoin exchange-traded funds have seen record outflows over the past month, and bitcoin closed a losing first half, so the retail flows the thesis wants to move past are running in reverse rather than building the institutional depth it calls for.

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The skeptical read is simpler, however. Falling returns per dollar are what happens to any asset as it grows, since a larger base moves less in percentage terms, no matter who is buying, and nothing guarantees institutional money arrives at the scale the bullish case needs.

READ: Live markets: Bitcoin pops to $63,900, then reverses, as week begins

Source: Coindesk