From the perspective of historical cycles, Bitcoin's bull market: this wave is different

Since its birth in 2009, Bitcoin has experienced multiple sweeping market cycles. Each bull market carries its own market story—from geeky celebrations to institutional entry, from regulatory pressure to policy recognition. Understanding these historical patterns is crucial for grasping the current and future market rhythms.

Current Market Overview: ETF + Halving Double Engine

2024 is a milestone year in Bitcoin history. As of now, BTC has reached $92.58K, a 132% increase from the $40K at the beginning of the year. What is driving this rally? Two simple words: ETF approval and four halving events.

After the SEC approved a spot Bitcoin ETF in January, institutional funds flooded in. By November, total ETF net inflows exceeded $2.8 billion, even surpassing the growth rate of gold ETFs. What does this mean? Bitcoin has officially evolved from a “high-risk investment” to a “traditional asset allocation tool.”

Meanwhile, the April halving event further tightened supply. Historically, Bitcoin has experienced significant rallies after each halving—5200% after 2012, 315% after 2016, and 230% after 2020. This time is no exception.

Looking Back: Recognizing the Bull Market Patterns

2013 First Bull Run: From $145 to $1,200

2013 was Bitcoin’s wild growth phase. Mid-year prices hovered around $145, soaring to $1,200 by year-end, a 730% increase. The driving forces included: the Cyprus banking crisis revealing Bitcoin’s value as a “hedge asset”; early adopters and media attention skyrocketing; and infrastructure improving.

But this bull run also exposed early market risks. Mt. Gox, controlling 70% of trading volume, collapsed in 2014 due to security breaches, causing Bitcoin to plunge from $1,200 to $300—a 75% drop. This event left a deep mark: the risks of centralized exchanges.

2017 Retail Frenzy: From $1,000 to $20,000

2017 was the era of retail investors. Bitcoin started the year below $1,000 and surged to nearly $20,000, a 1900% increase. Everyone was talking about Bitcoin.

Drivers included:

• ICO craze: new projects raising funds via token issuance attracted many new users
• Lowered exchange barriers: more user-friendly platforms launched, making it easy for beginners to buy
• Media amplification: every surge was widely reported, creating FOMO and pushing prices higher

But the good times didn’t last. Regulators grew wary—SEC expressed concerns, and China outright banned ICOs and domestic exchanges. By early 2018, Bitcoin dropped from $20,000 to $3,200, an 84% decline. The lesson? Retail euphoria is unsustainable; markets need real fundamentals.

2020-2021 Institutional Era: From $8,000 to $64,000

This bull cycle’s main players shifted from retail to institutions. Bitcoin rose from $8,000 in early 2020 to $64,000 in April 2021, a 700% increase.

Key turning points:

• Major companies entering: MicroStrategy, Tesla, Square, etc., adding Bitcoin to their balance sheets, signaling that Bitcoin is no longer just speculative but part of asset allocation
• Derivatives market maturation: Bitcoin futures and ETFs provided regulated channels for institutional participation
• Inflation expectations: During the pandemic, massive liquidity injections led investors to worry about inflation, boosting Bitcoin’s appeal as “digital gold”

During this period, Bitcoin’s narrative upgraded from “decentralized currency” to “inflation hedge.” Public data shows over $1 billion in institutional inflows in 2021.

What Makes This Market Different

Institutional Channels Fully Opened

Past bull markets required institutions to build infrastructure, handle custody, and navigate regulatory risks. Now? Just buy an ETF. BlackRock’s(IBIT fund alone holds 467,000 BTC, and total Bitcoin ETF holdings exceed 1 million coins. What has this changed? Significantly enhanced Bitcoin’s stability and legitimacy.

Supply Scarcity Intensifies

Halving cycles + institutional accumulation = tight supply. MicroStrategy, Bhutan)Bhutan(, and other entities/nations continue increasing holdings, while new Bitcoin output declines post-halving. This supply-demand mismatch is rare in history, suggesting potential for even greater price upside.

Policy Friendly Attitudes Rise

U.S. senators proposed the “BITCOIN Act,” recommending the Treasury acquire 1 million BTC over five years. El Salvador has adopted Bitcoin as legal tender. Bhutan is quietly accumulating. These shifts in government stance indicate Bitcoin is no longer “fringe” but a strategic national asset.

The Next Market Uncertainties

Will Technical Upgrades Materialize

Activation of OP_CAT could enable Bitcoin to support Layer-2 and DeFi applications. Once realized, Bitcoin’s use cases could expand dramatically—from a simple “store of value” to a “productive tool.” This will attract entirely different investor types.

Can ETF Scale Continue to Grow

Currently, $2.8 billion seems substantial, but compared to gold ETFs worth hundreds of billions, there’s huge room for growth. If Bitcoin ETFs eventually absorb trillions of dollars, what does that mean? Potentially a 3-5x increase in Bitcoin’s price.

Geopolitical Black Swans

Expectations of rate cuts, shifts in dollar strength, and global economic adjustments could all alter Bitcoin’s valuation logic. Moreover, the FOMO before halving and the post-halving rally often involve sharp volatility.

How to Prepare for the Next Cycle

Understand Fundamentals

Why does Bitcoin exist? What is its technological principle? Why is the total supply fixed at 21 million? Clarifying these questions helps maintain rationality amid market swings.

Study History but Don’t Worship It

Bull runs in 2013, 2017, and 2021 followed very different paths. Don’t expect history to repeat exactly. Each cycle has new drivers and risks.

Diversify Risks and Allocate Reasonably

While Bitcoin is king, a complete portfolio shouldn’t be all-in. Consider other major cryptocurrencies, DeFi opportunities, and traditional assets.

Choose Secure and Reliable Exchanges

Exchange security, liquidity, and fee structures directly impact your returns. Look for platforms with strong risk controls, transparent operations, and good user reputation.

Continuous Learning and Vigilance

Join community discussions, monitor policy developments, and track on-chain data—these can help you anticipate market shifts. But beware of “groupthink”; when everyone is talking about buying, consider the risks carefully.

Summary

Bitcoin’s history is a cycle of “breakthrough—correction—rebirth.” From the initial geek experiments, to 2017 retail frenzy, to current institutional acceptance, each phase has advanced the asset’s maturity.

The 2024-2025 rally is essentially another node in this ongoing process—fueled by institutional channels, supply constraints, and friendly policies. These factors make this cycle different from previous ones.

But always remember: there are no eternal bull markets, nor inevitable bear markets. Markets are constantly evolving. Understand history but don’t be bound by it. Recognize risks but don’t be paralyzed by them. That’s the right attitude to navigate cycles.