Bitcoin Cycle: From Historic Highs to Next Investment Opportunities

Bitcoin, the world’s largest digital asset, has experienced a volatile journey since its inception in 2009. With the current price at $87,37K, Bitcoin continues to demonstrate its important role in the cryptocurrency market. Each development phase of Bitcoin is marked by significant events, strong price rallies, and considerable challenges. To better understand the next investment opportunities, we need to examine past market cycles and the factors that create them.

Characteristics of a Bitcoin Bull Cycle

A Bitcoin bull cycle is not a random event but the result of a combination of technical factors, investor demand, and regulatory developments. Looking back at history, each price surge has its own characteristics:

Rapid price growth often lasts from a few weeks to several months, with trading volume spiking. Technical indicators like RSI (Relative Strength Index) surpassing 70 signal strong buying momentum. Social media activity explodes, new wallet creation surges, and stablecoin flows into exchanges accelerate like never before.

When it comes to scarcity, the halving event (halving) of Bitcoin—occurring every four years—plays a crucial role. This event cuts mining rewards roughly in half, creating a supply shortage in the market. Historical data shows: after the 2012 halving, Bitcoin increased by 5,200%; after the 2016 halving, it rose by 315%; and after the 2020 halving, it increased by 230%. This cycle repeats consistently, driving price growth over time.

2013: The Beginning of Bitcoin on the Global Stage

2013 is considered the startup phase for Bitcoin. From a price $145 in May, Bitcoin skyrocketed to $1,200 by the end of the year—an impressive 730% increase. This was the first time Bitcoin attracted widespread media and public attention.

Factors driving this phase include the bank crisis in Cyprus, which led some investors to view Bitcoin as a safe haven asset. Increased media coverage also created a feedback loop: price rises → media reports → increased attention → further price increases.

However, the collapse of Mt. Gox in early 2014—then handling 70% of Bitcoin transactions—caused a long-term market downturn, with Bitcoin falling below $300, down 75% from its peak. This event taught the market an important lesson about security and infrastructure.

2017: The Retail Investor Boom

2017 marked the true rise of retail investors. Bitcoin increased from $1,000 at the start of the year to nearly $20,000 by December—an increase of 1,900%. Daily trading volume grew from less than $200 million to over $15 billion.

The Initial Coin Offering (ICO) frenzy was a major catalyst, as many new projects raised funds through token issuance. This attracted a huge influx of new investors also interested in Bitcoin. User-friendly exchanges emerged, making it easier for retail investors to participate.

However, in 2018, Bitcoin entered a bear market, dropping from $20,000 to $3,200—an 84% decline. Factors causing this decline included SEC regulatory scrutiny, China’s ban on ICOs, and natural market correction after a price explosion.

2020-2021: The Institutional Investor Era

The 2020-2021 period is seen as a major turning point in Bitcoin history. From $8,000 at the start of 2020, Bitcoin surged to $64,000 in April 2021—an increase of 700%.

This time, Bitcoin attracted attention from institutional investors and large corporations. MicroStrategy holds over 125,000 BTC, while Tesla and Square also added Bitcoin to their balance sheets. Institutional capital flows exceeded $10 trillion. The narrative shifted: Bitcoin is no longer just a speculative asset but is regarded as “digital gold”—a hedge against inflation amid loose monetary policies.

The approval of Bitcoin futures contracts at the end of 2020 also opened new investment channels. However, this cycle also saw environmental concerns related to Bitcoin mining and increased regulatory scrutiny.

2024-2025: The ETF-Led Revival

2024 began with a significant milestone: the SEC approved spot Bitcoin ETFs in January. This opened a new entry point for institutional investors and those preferring not to manage digital assets directly.

Fund flows into Bitcoin ETFs exceeded $28 trillion by November 2024, surpassing global gold ETF markets. Bitcoin, starting at $40,000 in early 2024, rose to nearly $93,000 by November—an increase of 132%. This set a new all-time high, surpassing previous peaks.

The fourth halving event in April 2024 also fuels bullish sentiment. Additionally, positive signals from policymakers, especially the proposed BITCOIN Bill 2024—requiring the U.S. Treasury to buy up to 1 million BTC over five years—boost market confidence.

Countries like Bhutan (with over 13,000 BTC) and El Salvador have integrated Bitcoin into their national reserves, indicating a global shift toward digital assets.

How to Identify When a Bull Cycle Is About to Occur

To forecast the next bull cycle, investors should monitor three key areas:

Technical Indicators: Track RSI, 50-day and 200-day moving averages. When prices cross these moving averages, it often signals the start of an upward trend.

On-Chain Data: Increasing wallet activity, stablecoin flows into exchanges, and declining Bitcoin reserves on exchanges are accumulation signs. In 2024, total Bitcoin holdings by ETFs surpassed 1 million BTC, reflecting strong institutional demand.

Macro Factors: Regulatory approvals, government policies, halving events, and global economic conditions all influence. The ETF approval in 2024 is a prime example.

Notable Signals for the Future

Some developments could trigger the next bull cycle:

Acceptance of Bitcoin as a Strategic Reserve: If the U.S. or other countries officially recognize Bitcoin as part of their national reserves, institutional demand will surge.

Technological Upgrades: Deploying OP_CAT could enable Bitcoin to process thousands of transactions per second via Layer-2 solutions, opening DeFi possibilities on Bitcoin.

New Institutional Products: Mutual funds, leveraged ETFs, and other regulated products will continue to attract large capital flows.

Next Halving Cycle: The upcoming (expected in 2028) halving will further reduce Bitcoin’s inflation rate, potentially creating new scarcity.

Preparing for the Next Investment Opportunity

Instead of trying to predict the exact timing, investors should focus on comprehensive preparation:

Enhance Knowledge: Understand blockchain technology, Bitcoin whitepaper, and historical cycles. Analyze past rallies to recognize patterns.

Develop Clear Strategies: Define your financial goals, risk tolerance, and investment horizon. Diversify your portfolio instead of concentrating solely on Bitcoin.

Choose Reliable Platforms: Use exchanges with strong security measures, two-factor authentication, and cold storage for long-term holdings.

Protect Assets: Use hardware wallets to securely store Bitcoin, enabling all available security features.

Stay Informed: Follow reputable news sources, regulatory trends, and upcoming events like halving or ETF approvals.

Trade Responsibly: Avoid emotional decisions or FOMO (fear of missing out). Use stop-loss orders to protect investments.

Manage Taxes: Keep detailed records of all transactions for accurate tax reporting according to local regulations.

Conclusion: Opportunities and Challenges

Bitcoin is not a simple investment. It is a volatile asset influenced by market sentiment, regulatory developments, and macro events. However, history shows that Bitcoin can recover and grow through various cycles.

With the current price at $87,37K, Bitcoin remains the leading digital asset. Future bull cycles will depend on a combination of technical, policy, and investor sentiment factors.

There is no secret formula to predict exactly when the next bull cycle will start. But by monitoring key indicators, understanding market history, and preparing thoroughly, you can position yourself to capitalize on opportunities when they arise. Whether you are a long-term investor or a short-term trader, understanding these cycles is key to making informed investment decisions in the volatile cryptocurrency market.