While there is no rule of thumb regarding the route that a monetary asset will follow during its potential monetarization, a curious trend has emerged during the relatively brief history of early monetarization of Bitcoin. The price of Bitcoin seems to follow a trend towards fractal progression, in which each iteration of this fractal harmoniously follows a classic form of the hype cycle (this cycle is a trademark of the Gartner group). Each cycle of the Gartner-type hype begins with an explosion of enthusiasm for the new technology and the price flames on the market by the entry into play of participants who can afford this first iteration. Initial buyers in a hype Gartner cycle typically have a strong belief about the deeply transformative nature of the technology in which they invest. Eventually, the market can reach a crescendo of enthusiasm as the supply of new participants that can be swept away by this Gartner hype cycle grows and that the global purchase is dominated by speculators more interested in quick profits. only by the underlying technology. Following the peak of the Gartner hype cycle, prices are falling rapidly and speculative fervor is quickly being replaced by despair, public jokes and the impression that the technology will ultimately not be transformative at all. Eventually, the price can reach a plateau at a diminished price at which original investors maintaining their initial confidence are joined by a new cohort of investors who have been able to withstand the suffering caused by the crash and who, they also know appreciate the importance technology in itself. The plateau then lingers for an extended period of time in different forms, which Casey describes as a “boring stable depression.” During the stage, public interest in technology will diminish but it will continue to grow and the community of committed enthusiasts will slowly grow. A new base is then established for a new iteration of the Gartner hype cycle as outside observers recognize that technology is not going away and investing in its future may not be as risky as it seemed the crash phase of the previous cycle. The next iteration of the Gartner hype cycle will bring an even wider range of adopters and will then be further enlarged in magnitude.
Very few people participating in an iteration of a Gartner hype cycle will correctly anticipate how much prices will climb before stabilizing within this iteration itself. Prices usually reach levels that may seem quite absurd to most investors in the early stages of the overall cycle. When the cycle ends, the media tends to look for a cause to attribute to this new crash. While the designated event can indeed sometimes be considered precipitous, this is often not the fundamental reason for the end of the cycle. Gartner-type hype cycles end because a depletion of market participants ends up being observed on this cycle itself.