Looking at historical cycles, Bitcoin's next upward phase

Bitcoin, as the largest cryptocurrency by market capitalization, has experienced multiple cycles of significant bull and bear markets since its inception in 2009. Among them, crypto bull run cycles have become an important benchmark for market participants to study investment strategies. Currently, Bitcoin is trading at $88.68K, still room to reach its all-time high of $126.08K, and understanding the logic behind these cycles may help you seize the next opportunity.

Current Market Conditions: New Features of the Bull Market from $88K

According to the latest data, Bitcoin’s performance by the end of 2024 has been quite impressive. From around $40K at the beginning of the year to the current $88.68K, the increase has reached 132%. The biggest difference from previous bull runs is that institutional capital inflows have become the main driving force.

In 2024 alone, Bitcoin spot ETFs attracted over $450 million in net capital inflows. BlackRock’s IBIT ETF holds over 467,000 BTC, and the total assets in the Bitcoin ETF ecosystem have surpassed $1 trillion. This indicates that Bitcoin is no longer just a speculative asset pursued by retail investors but is becoming a standard asset allocation tool for traditional financial institutions.

From a technical perspective, Bitcoin’s Relative Strength Index (RSI) broke above 70 in November, indicating strong buying sentiment. However, at the same time, the new all-time high of $126.08K reminds participants — while the current price is not at the peak, it is not far from the top.

Historical Review: Understanding the Driving Engines of Bitcoin Bull Markets

( 2013: The First Rally from $145 to $1,200

2013 can be called Bitcoin’s “debut year.” That year, Bitcoin soared from $145 in May to $1,200 in December, a 730% increase. The main drivers of this bull market were not institutional but improvements in infrastructure and a surge in media attention.

That year coincided with the Cyprus banking crisis, prompting some investors to seriously consider the concept of “assets outside the banking system.” However, the security breach at Mt. Gox in early 2014 shattered this enthusiasm, and Bitcoin briefly fell below $300.

Key takeaway: Early bull markets lacked resilience because infrastructure was still underdeveloped.

) 2017: ICO Boom and Retail Frenzy

From $1,000 to $20,000, Bitcoin achieved a 1,900% growth in 2017. The participants had changed — retail investors flooded in.

The rise of ICOs (Initial Coin Offerings) attracted a large influx of newcomers into the crypto market. Exchanges also flourished during this period, making it easy for anyone to buy Bitcoin. Media hype further fueled the “FOMO” (Fear of Missing Out) mentality.

By the end of 2017, daily trading volume soared from $2 million at the start of the year to $15 billion. But regulatory authorities responded with caution — China banned ICOs and domestic exchanges. Bitcoin dropped over 80% in 2018, halving from $20,000 to lower levels.

Key takeaway: Retail-driven bull markets are often highly fragile; regulatory pressure is the biggest killer.

2020-2021: The Era of Institutional Adoption

From $8,000 to $64,000, this bull market saw the formal entry of institutional capital. Large companies like MicroStrategy, Tesla, and Square began to hold Bitcoin as a strategic asset. Bitcoin futures and non-US ETFs received approval, providing compliant channels for large funds to participate.

Massive fiscal stimulus during the pandemic raised inflation concerns, positioning Bitcoin as “digital gold” and an inflation hedge. Throughout 2020-2021, institutional investments in Bitcoin exceeded $10 billion.

Although this bull market experienced a 53% correction in mid-2021 (from $64K to $30K), the overall trend remained intact. The presence of institutional participants made market volatility large but not catastrophic.

Key takeaway: Institutional capital has transformed Bitcoin from a “gambling asset” into a “class of assets.”

The True Engines Behind Bull Market Cycles: Halving Events

You may have noticed a pattern — Bitcoin’s major price surges often occur around halving events.

• After 2012 halving: +5,200%
• After 2016 halving: +315%
• After 2020 halving: +230%

Why is this? The answer is simple — halving reduces Bitcoin’s new supply, and if demand remains or increases, prices naturally rise.

The April 2024 halving follows this pattern. Newly mined supply drops from 6.25 BTC per block to 3.125 BTC per block, creating a significant supply gap. Meanwhile, the massive capital inflow driven by spot ETFs fills this gap, forming a perfect “supply-demand mismatch” — prices naturally rise.

New Strategies in the Spot ETF Era

In January 2024, the SEC approved a US spot Bitcoin ETF, marking a watershed moment. Why is this so important?

Because it allows traditional financial institutions to participate in Bitcoin through familiar means — via ETF funds rather than direct crypto purchases. This removes many psychological barriers and operational complexities for institutional investors.

From approval to November, the inflow of funds into spot ETFs set records. Compared to gold ETFs, which took years to reach similar scales, Bitcoin ETFs only took a few months. This reflects the rapidly increasing recognition of Bitcoin as an asset class.

Signals for the Next Bull Market: What to Watch?

If you want to seize the next crypto bull run cycle, the following indicators are worth monitoring:

On-chain Data:

• Bitcoin reserves on exchanges. When large amounts are withdrawn from exchanges, it often indicates “HODLing” and is a bullish sign.
• Stablecoin inflows. The scale of stablecoins entering exchanges reflects buying power and signals capital readiness.
• Active wallet count. This directly reflects market participation.

Technical Indicators:

• RSI breaking above 70 signals strength, but also watch for overheating.
• Golden cross of the 50-day and 200-day moving averages often marks trend reversals.

Macro Factors:

• Federal Reserve interest rate policies. Rate cuts generally favor Bitcoin.
• Geopolitical risks. Uncertainty tends to drive investors toward safe-haven assets.
• Policy support. The US has lawmakers promoting the “Bitcoin Act,” proposing the Treasury buy 1 million BTC over five years.

Risks That Cannot Be Ignored

Every previous bull market peak was accompanied by corresponding risks. Currently, the main risks include:

Overheating: When Bitcoin rapidly rises from $40K to nearly $100K, profit-taking pressure increases. Large sell orders can trigger chain reactions.

Regulatory Risks: Authorities worldwide are enacting stricter rules. Bans or severe restrictions in major countries could dampen market sentiment.

Macroeconomic Risks: Unexpected economic data (e.g., renewed inflation, soaring unemployment) could lead to a collective sell-off of risk assets.

Environmental Concerns: Bitcoin mining’s energy consumption continues to attract attention, and ESG investors may exert pressure.

How to Prepare for the Next Bull Market

Build a Knowledge Base

Deeply understand Bitcoin’s operational mechanisms, historical cycles, and market drivers. Avoid blind speculation; make decisions based on understanding.

Develop a Clear Investment Strategy

• Define your risk tolerance and investment horizon.
• Avoid investing all at once; consider dollar-cost averaging (DCA) to average out costs.
• Set stop-loss levels to protect against downside risks.

Choose Compliant Platforms

Select exchanges with robust security measures and regulatory licenses. Industry standards include cold wallet storage, 2FA authentication, and regular security audits.

Self-Custody Principles

For long-term holdings, use hardware wallets for self-custody. Platform risks are everywhere; self-custody is the last line of defense.

( Diversify Portfolio While Bitcoin is important, it shouldn’t be all-in. Consider other cryptocurrencies or traditional assets to reduce overall risk.

) Continuous Learning Stay updated on industry developments, policy changes, and on-chain data. The market’s textbook keeps evolving; keeping pace is crucial.

Future Variables to Watch

Government Adoption

El Salvador has adopted Bitcoin as legal tender, and the Bhutanese government holds over 13,000 BTC. If more countries follow suit, Bitcoin’s fundamental demand will significantly increase.

Technological Upgrades

Bitcoin plans to introduce upgrades like OP_CAT, which could enable Layer-2 solutions supporting thousands of transactions per second. This could transform Bitcoin from a simple “store of value” to a platform capable of complex financial applications — directly threatening Ethereum’s DeFi dominance.

More Financial Derivatives

As Bitcoin gains acceptance among institutions, derivatives around it will become more diverse. The emergence of options, structured products, and other tools will make the market more complex and potentially more manipulable.

Final Words

Bitcoin’s bull market cycles reflect not only price movements but also the evolution of the entire financial system’s perception of digital assets. From the speculative frenzy of 2013, retail FOMO in 2017, institutional recognition in 2020-2021, to the ETF era of 2024 — each stage involves different participants, drivers, and risk characteristics.

Currently, Bitcoin at $88.68K is in a high-range zone, with room to reach the all-time high of $126.08K. But this does not mean blindly chasing highs. The next bull run may still require new catalysts — perhaps halving, policy breakthroughs, or technological upgrades.

Most importantly: be well-prepared, manage risks properly, and keep a calm mindset. Only then can you seize opportunities when they come, and withstand risks when they erupt.