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At the peak of the bull market, the rally to nearly US$70,000 per bitcoin last year seemed to be a big spike. What a number!

What one unit of anything investible is actually US$70,000? Sure, one Berkshire Hathaway Inc. class-A share is about US$400,000. But what else? A barrel of oil is considered expensive when it’s over US$100.

But absolute numbers are deceptive because what comprises a single unit is entirely arbitrary.

Without its stock splits – in which one share is arbitrarily divided into a certain number so that individual shares appear cheaper – one Apple Inc. share would be worth more than US$30,000, as opposed to US$130 currently.

It’s thus more accurate to not look at absolute numbers, but percentages. And through that lens, bitcoin hasn’t really been wildly appreciating. Through every market cycle, the peaks have been lower, in fact.

That reflects great forces coursing through the markets that have only been more intense as of late: the regulation and enforcement that, while welcomed by some, are changing crypto in a fundamental way.

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All that points to an inevitability: the days of the constant wild price gyrations and outsized gains are over.

In the boom-bust cycles of bitcoin, there have been three notable peaks: US$1,000 in 2013, nearly US$20,000 in 2017 and almost US$70,000 in 2021.

Each time, the rally in percentage terms has gone down. The last peak was just a little more than three times of the one before it. But 2017′s US$20,000 was 20 times the peak of 2013.

And 2013′s US$1,000, compared with prices before? Well, before that, bitcoin markets were even less established than now, and objectively determining the price is difficult.

Those were the days when, famously, 10,000 units were exchanged for two pizzas. For all intents and purposes, bitcoin was virtually worthless back then. From that to its 2013 peak of US$1,000 – whatever multiple that was, it was definitely way more than 20 times.

What had driven this rally was the ease of participation for both investors and those who make the investment products.

Unlike any other financial instrument, bitcoin, and the world of cryptocurrency it spawned, had come with no paperwork for anyone. You could meet someone off Craigslist, pay them in cash and receive bitcoins on a smartphone app.

On the side of industry, anyone could start their own coin or exchange platform. The collapsed QuadrigCX exchange was infamously just one guy on his laptop.

All that ease resulted in a wave of new money entering the crypto world, money that had not been in the markets before. In early 2022, a survey showed that 55 per cent of bitcoin investors had started within the last year.

That’s not going to go on for much longer. And it’s not just because of the macroeconomic conditions of higher interest rates and costlier borrowing.

Enforcement has been unprecedented. The U.S. government has imposed sanctions on some blockchain code, as both the Justice Department and an increasingly hawkish Securities and Exchange Commission increase scrutiny of the industry.

The world’s largest exchange platform, Binance, is under investigation by nearly every arm of the U.S. government, and some in the industry speculate that its founder is avoiding the country owing to fears of arrest (which he has denied).

Even the creators of the Bored Ape Yacht Club NFT (non-fungible token) collection of digital pictures is under investigation by the SEC.

On Monday, the Organization for Economic Co-operation and Development proposed new global rules on crypto, and the European Union separately firmed up its own new rules.

The European Commission has been looking at analyzing data on the Ethereum platform, which underpins a great portion of the crypto world. Such analysis has been big business for firms that do so – crypto activity is becoming more and more open and trackable.

In short, this is a reversal of the phenomenon that had made crypto rally so hard in the earlier years. Under the growing regulatory yoke, crypto is being forced to become more like mainstream finance, with all of its associated red tape.

To be sure, this does not mean that crypto’s price movements will, in the near future, become like mainstream finance or that we would never again see headlines with a much bigger number for one unit of bitcoin.

It’s just that those days would be fewer and farther between, and the market would take a lot longer to reach those big numbers.

For that ridiculous ease with which people could both invest in crypto or create investment products is becoming a thing of the past. And while crypto might be safer, less volatile and more pleasing to the authorities as a result, it would also become more boring and less attractive to those seeking its traditional outsized gains.

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