An observation made by Adam Back at the Miami Beach Conference is quite interesting. It’s not that Bitcoin’s recent volatility has broken the theory; rather, it’s following the pattern of a four-year cycle.

When you think about it, that really makes sense. Over the past 1 year, Bitcoin has fallen by about 12%, and that was a move that didn’t match positive news such as institutional investment entering the market and the launch of spot ETFs. Explaining this, Adam Back presented an interesting point: some market participants may be trading according to historical patterns rather than fundamentals. In other words, it means there are investors waiting right now because they expect the price to recover by the end of this year.

What’s even more intriguing is the structure of institutional participation. Adam Back described ETF holders as being more “sticky” than retail traders. That means retail investors throw all their capital into the market during bull runs but don’t have the capacity during downturns, whereas institutions can rebalance their entire portfolios. However, there’s an important warning here. Adam Back said that there still isn’t a lot of institutional capital. Even if regulatory obstacles are resolved and clear rules are established, the large pools of capital have not fully entered the market yet.

The volatility issue also needs to be reconsidered. Adam Back compared Bitcoin to early-stage high-growth stocks. Just as early Amazon stock saw large price swings due to uncertainty in the market, a rapid adoption curve inherently comes with volatility. He expects volatility to ease as more institutions, companies, and countries become exposed over time. Of course, it won’t disappear completely, but it may show more stable movements like gold.

Interestingly, gold and silver have recently been showing strength. This is a sign that capital seeking refuge from inflation concerns and geopolitical risks is flowing into traditional metals rather than digital assets. However, Adam Back believes that, from a long-term perspective, Bitcoin still has significant growth potential. Compared with gold’s total market capitalization, Bitcoin is currently about 10 to 15 times smaller. That means that if it continues to secure its position as a store of value, there is still ample room for additional growth.

Short-term volatility is certainly frustrating, but in Adam Back’s view, this isn’t a contradiction in the 비트코인 논문; it’s simply a characteristic of the adoption stage. And the fact that over the past 10 years, Bitcoin has recorded the highest average annual return among all asset classes is still true. His final message is that volatility is only part of the bigger picture.