Bitcoin Bull Market Cycles: From Halvings to Institutional Investment

Bitcoin’s journey through financial history exhibits a pattern of explosive growth periods followed by sharp corrections. Since 2009, digital assets have perhaps witnessed more dramatic price movements than any other financial instrument. If you want to understand the intense rally of 2024-2025—when Bitcoin recently hit all-time highs—it’s essential to examine how major past rallies unfolded.

Today: One of Bitcoin’s Strongest Ascents

As of November 2024, Bitcoin surpassed $93,000, gaining 132% since the beginning of the year, reaching a remarkable milestone. After the April 2024 Fourth Halving event, prices began to surge sharply. This rally coincided with three converging factors: approval of spot Bitcoin ETFs in the US in January 2024, supply shock expectations, and optimism about crypto-friendly policies following Donald Trump’s election.

In terms of assets under management, cumulative net inflows into spot Bitcoin ETFs have exceeded $4.5 billion. BlackRock’s IBIT ETF holds over 467,000 BTC, and the combined assets of all Bitcoin ETFs have surpassed 1 billion BTC for the first time in history. Institutional players like MicroStrategy and other stock companies have accumulated thousands of BTC, further constraining the physical supply available on trading platforms.

Bitcoin Halving: The Supply-Reducing Engine

One of the most powerful mechanisms behind Bitcoin’s price cycles is the halving event. Occurring roughly every four years, these events cut the rate of new Bitcoin creation in half. Historically, each halving has led to sharp rallies following supply scarcity and subsequent price appreciation.

After the 2012 halving, Bitcoin increased by approximately 5,200%. The second halving in 2016 resulted in a 315% gain. The third halving in 2020 saw a 230% return. Leading up to the latest event in 2024, market analysts’ forecasts remained mostly positive—and so far, they have been right.

Historical Review: The Anatomy of Past Rallies

2013: Early Adopter Excitement

Bitcoin’s first major surge was remarkable. Starting at $145 in May, it soared past $1,200 by December—an increase of about 730%. This initial rally was a period of discovery: could Bitcoin truly be digital gold?

However, early 2014 saw the collapse of Mt. Gox, a platform controlling about 70% of the market’s trading volume. Following a security breach, the platform shut down, and investors faced significant losses. Bitcoin plummeted 75%, entering a bear market that lasted years.

Yet, the market survived. This demonstrated Bitcoin’s resilience despite its volatility.

2017: ICO Frenzy and Media Hype

2017 was the year Bitcoin entered mainstream finance. Starting around $1,000 in January, it reached nearly $20,000 by December—an increase of 1,900%. The ICO boom, with hundreds of new crypto projects selling tokens, fueled this frenzy.

Daily trading volume skyrocketed from $200 million to $15 billion. As social media discussions intensified, prices climbed further. But in December 2018, reality hit: Bitcoin fell to $3,200—an 84% crash. Regulatory pressures, including bans on ICOs in China, marked the start of a bear market.

( 2020-2021: Institutional Identity Crisis

The COVID-19 pandemic unexpectedly became Bitcoin’s best marketing. As governments flooded economies with money and interest rates hit zero, asset managers and corporate treasuries sought inflation hedges. Bitcoin emerged as “digital gold.”

The corporate narrative shifted. MicroStrategy added Bitcoin to its balance sheet. Tesla did the same. Square also bought in. By November 2021, Bitcoin hit $69,000—its all-time high, demonstrating institutional legitimacy.

However, the 2021-2022 correction was severe. Bitcoin dropped 53%, followed by further erosion.

Understanding the Drivers of the 2024 Rally

The current rally appears different from previous ones. The mention of ETF approval has introduced a completely new system. Institutional investors can now buy Bitcoin on exchanges—without concerns over hardware wallets, private keys, or large risks.

Moreover, the timing of the halving cycle was perfect. The latest supply restriction coincided with rising institutional demand. Supply decreased, demand increased, and prices surged.

Regulatory environment also shifted. Trump’s election renewed hope for crypto-friendly policies. Senator Cynthia Lummis’s 2024 Bitcoin legislation proposal suggests the US could hold up to 1 million BTC within five years. Such a move could solidify Bitcoin’s status as “digital gold” in government reserves.

Shaping Factors: Lessons from Halving Chart History

In Bitcoin’s historical price map, halving events are prominent inflection points. After each event, the growth in trading volume is often driven by initial public interest, institutional participation, or macroeconomic conditions. However, supply scarcity always provides a steady underlying push.

Developers are now discussing adding new capabilities to Bitcoin. A code segment called OP_CAT, combined with Layer-2 solutions, could enable Bitcoin to process thousands of transactions per second. This could position Bitcoin to compete in DeFi, transforming it from a simple store of value to more.

Future Frictions and Risks

While the 2024 rally looks solid, Bitcoin markets remain sensitive to unknown factors. Sudden moves in interest rates, macroeconomic downturns, or regulatory changes could trigger sell-offs.

Speculative buying and FOMO )fear of missing out( can create bubbles. Retail investors, especially with leveraged positions, can intensify volatility. Environmental concerns—such as Bitcoin mining’s carbon footprint—may also deter ESG-focused investors and regulators.

Additionally, market saturation is a factor. As Bitcoin’s market cap grows, replicating a 132% gain becomes more challenging. Investors are turning to new altcoins seeking higher returns.

Preparing for the Next Rally

Understanding past bull markets can help prepare for the next one. Here are some steps:

Learn the fundamentals: Read technical analyses of Bitcoin. Understand blockchain technology. Grasp why its supply is limited—and how that influences price dynamics.

Diversify your portfolio: Bitcoin isn’t your only asset. Mix in other cryptocurrencies and even traditional asset classes. A balanced portfolio guards against volatility.

Choose exchanges carefully: Seek platforms with strong security protocols, low fees, and easy access. Enable two-factor authentication. Use cold storage.

Follow trends: Stay informed about ETF approvals, halving events, and regulatory announcements. Technical indicators—RSI, moving averages—signal momentum shifts.

Control your emotions: Develop a strategy and stick to it. Avoid impulsive decisions driven by fear or greed. Use stop-loss orders.

Final Words: Capitalizing on the Next Uptrend

Bitcoin’s four major rallies since 2013 tell a story of an evolving asset class. From early adopter enthusiasm and media hype, to institutional legitimacy and finally the emergence of regulated financial products, each phase brought new players and dynamics.

When the next bull market begins remains uncertain. But Bitcoin’s unconditional resilience, cyclical supply reductions, and growing institutional interest increase the likelihood of further rallies. Investors should monitor halving events, ETF developments, and regulatory shifts.

At today’s price of $86,950, Bitcoin still looks on track. Corrections before takeoff wouldn’t be surprising. But history shows that as Bitcoin advances, scarcity and adoption growth are approaching again—each halving cycle heralding another incentive.

Stay prepared. Stay sensitive. Stay informed.