Just as the "Lengthening Cycles" theory was wrong, it is also very likely that the "Diminishing Returns" theory would be wrong, meaning bull markets will not always have lower returns.

This Bear Market has really shown all of those wannabe analysts and "predictors" that pretended to have some kind of certainty in those highly volatile market, how things actually go. Which caused nearly all of the major price indicators to be proven wrong by the brutality of this bear market, one of the most known ones may be the Rainbow Chart or even PlanB's Stock to Flow model.

One of the other most known theories, by a person that is actually quite respected around the Cryptoverse, is the Lengthening Cycles and Diminishing Returns theory by Ben Cowen.

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Video of Benjamin Cowen, where he admitted that the lengthening cycles theory is wrong by himself

The theory predicted how each Bitcoin Cycle would get longer, while also having lower gains. It did make a lot of sense and was historically right, but by the BTC cycle ending in late 2021, it was proven wrong as the 2021 cycle was about as long as the 2017 cycle.

Now that only caused the Lengthening Cycles part to be proven wrong, the Diminishing Returns part is still right as the gains of 2021 were lower than in the 2017 cycle.

But as with each other theory, this one may also be proven wrong, especially with the high amount of institutional liquidity and global mass adoption coming in right now. BTC and all of Crypto may have reached a tipping point, where we could see a greatest bull market happening now. It may or may not happen, but it is certain that such a Diminishing Returns theory can just be as fragile as every other theory is.