Bitcoin Cycle Revelation: The Wealth Cycle from $145 to $88K

Since its birth in 2009, Bitcoin has experienced several magnificent bull market cycles. From early surges to institutional entry, from scattered retail investors to national-level asset allocations, this digital asset repeatedly tests investors’ psychology and judgment with its cyclical madness and calmness. Understanding the operating规律 of these cycles is crucial for grasping the next next bull run.

Cycle Engine: What Drives Bitcoin to Continuously Rally

Bitcoin’s bull markets are not random but driven by several core engines:

The Magic of Halving Cycles

Bitcoin halving, occurring every four years, is the most hardcore supply shock mechanism for this asset. After halving, the reward for new block issuance drops sharply, slowing the growth rate of circulating supply. Historical data shows that within 12-18 months after halving, Bitcoin often begins a new upward wave—over 5200% increase after 2012 halving, 315% after 2016, and 230% after 2020.

Amplification of Sentiment Cycles

The composition of investors at different times determines the quality of the bull market. The FOMO of retail investors and media frenzy in 2013, the ICO bubble and retail participation surge in 2017, the institutional布局 and “digital gold” narrative in 2020-21—each has its unique driving force. Currently, in 2024-25, approval of institutional ETFs marks the beginning of a new phase.

Policy Environment Turning Point

From initial indifference to now regulatory game-playing, marginal changes in regulatory attitudes can mobilize billions of dollars in capital flows. After the approval of the US spot Bitcoin ETF in January 2024, net capital inflows within just half a year surpassed $28.5 billion, far exceeding any previous capital潮.

From $145 to Today: Four Key Moments

2013 Awakening

Bitcoin soared from $145 to $1200, a 730% increase. This was the first time humanity realized that this thing born from a paper might really be valuable. The Cyprus banking crisis drove a risk-avoidance demand, but the real catalyst was the accumulation by early believers and the media’s first large-scale exposure. Of course, this boom ended with Mt. Gox’s collapse, wiping out over 75% of the market.

2017 Mass Moment

From $1000 to $20000, a 1900% surge in one year, trading volume skyrocketed from an average of $2 million per month to $15 billion. That year, even your taxi driver was talking about ICOs, and your aunt was asking how to buy coins. It was the peak of retail culture—beginners went crazy, exchanges were packed, FOMO was contagious. But the price paid was an 84% deep correction in 2018.

2020-21 Institutional Baptism

From $8,000 to $64,000, a 700% increase, but this time not retail investors, but listed companies like MicroStrategy, Tesla, Square began holding. The narrative of “digital gold” and “inflation hedge” started replacing the dream of overnight riches. The entry of giants like BlackRock and Grayscale gave this round a certain “orthodoxy.”

2024 ETF Turning Point

Bitcoin climbed from $40,000 at the start of the year to the current $88,680, a 122% increase. The difference this time is that the approval of the US spot ETF provided institutions with a “legitimate channel.” Capital no longer flows through high-fee trusts like Grayscale or complex OTC trades but via normal investment channels. This changes the nature of incremental capital.

Signal Lights for the Next Bull Market

On-Chain Data Truths

When large wallets accumulate大量 without selling, when exchange Bitcoin balances continue to decline, when stablecoins flow massively into exchanges—these are all signals of buildup. RSI突破70, price reclaims moving averages—often indicating a trend reversal.

Validation of Macro Background

Interest rate policies, dollar trends, geopolitical premiums, inflation expectations—these traditional financial variables are also effective for Bitcoin. When easing expectations return to the market, and safe-haven assets start gaining favor, Bitcoin often moves in tandem.

Acceleration of Institutional Allocation

New Bitcoin-related products launching, wealth management firms beginning to recommend holdings, corporate Bitcoin on balance sheets increasing—these all indicate a shift in institutional sentiment, often marking the eve of a new bull cycle.

Three Possible Futures

Imagination Space for Government Strategic Reserves

U.S. Senators proposed the BITCOIN Act, suggesting the Treasury buy 1 million BTC over five years. Although still a proposal, many countries have already taken action—Bhutan holds over 13,000 BTC, El Salvador holds 5,875. Once leading nations incorporate Bitcoin into foreign exchange reserves, the entire asset demand curve will be fundamentally rewritten.

Expansion of Bitcoin Network Functions

OP_CAT code upgrade could enable Bitcoin to gain Layer-2, rollup, and other expansion capabilities, meaning Bitcoin might become a branch of the DeFi ecosystem. Imagine Bitcoin not only as a “store of value” but also supporting lending, derivatives trading—revolutionary upgrades for its application scenarios.

Inflow of Next-Generation Investors

Improvements in traditional finance mechanisms (more ETF products, lower holding thresholds, stronger liquidity) will continue to attract investors previously blocked by complexity. Pension funds, sovereign wealth funds, insurance companies—when these giants start to move, the entire market participation will upgrade.

Preparing for the Next Cycle

Principles Beyond Chasing Gains

1. Understand Your Risk Tolerance — Bitcoin’s volatility means 20-30% daily drops are common. If this keeps you awake at night, consider reducing your allocation.

2. Gradual Position Building Instead of Lump Sum — History shows timing the market is nearly impossible. Dollar-cost averaging often outperforms chasing highs and panic selling.

3. Choose Secure Channels — Whether self-custody via hardware wallets or holding through exchanges, each approach has different security-utility trade-offs. Know your own capacity.

4. Pay Attention to Tax and Compliance — Different jurisdictions have vastly different tax treatments for crypto assets. Understand the rules in advance to avoid trouble later.

5. Psychological Preparation Is the Biggest Lesson — Watching your assets drop 30-40% in days without panic selling, or capitulating at the bottom out of fear, is a nightmare for most investors. Reading history and understanding cycles can help you stay rational during extreme行情.

Current Observation

Bitcoin is currently around $88,680, about 30% below its all-time high of $126,080. Whether this level can突破 and when depends on whether macro variables truly evolve as traders expect.

At this critical point in 2025, any shift in the halving cycle in May, further clarification of policy frameworks, or acceleration/stagnation of institutional allocation could change the trend.

The key is: don’t be fooled by short-term volatility. Bitcoin’s cycle is long-term. Those who panic-sold at lows in 2013 or 2017 will regret it in 2024. Conversely, those who blindly chased at peaks also experienced deep retracements.

Understanding cycles, respecting cycles, but not being hostage to cycles—that’s the correct attitude to coexist with Bitcoin. When will the next bull market arrive? History suggests paying attention to halving, policy, and sentiment resonance. But ultimately, your gains depend on whether you can find your position within the cycle.