Bitcoin Bull Market Cycle: From Early Speculation to Institutional Adoption

Since its inception in 2009, Bitcoin has experienced several cyclical surges that have shaken the market. These bull markets not only set new price records but also marked a leap in the recognition of crypto assets. From its origins as a geek experiment to becoming a part of global asset allocation, each Bitcoin rally hides a unique market logic behind it. Deeply understanding the mechanisms of these cycles is key for investors to seize future opportunities.

Underlying Drivers of Bitcoin Bull Markets

Bitcoin’s bull cycles are often driven by several core factors. Halving events occur every four years, creating scarcity pressure by reducing new coin supply. Institutional entry changes the composition of market participants, shifting from retail dominance to professional funds involvement. Policy evolution has moved from initial ambiguity to framework-based regulation, paving the way for long-term acceptance.

Historical data confirms this pattern. After the 2012 halving, Bitcoin surged by 5200%. Post-2016 halving, the increase was 315%. Following the 2020 halving, the rise was 230%. After the April 2024 fourth halving, this bull run continues.

Typical signals during bull markets include: surge in trading volume (2024 Bitcoin daily trading volume surpassing $15 billion), explosive on-chain activity (wallet addresses reaching new highs, exchange inflow decreasing), institutional holdings expanding (large funds like Grayscale, 21Shares doubling in size).

Compared to traditional markets, Bitcoin bull markets are more explosive—potentially doubling in a short period—but also face high risks. This high volatility stems from immature market structure, relatively limited liquidity, and highly emotional participants.

2013: The First Awakening of Crypto Assets

2013 marked a turning point in Bitcoin history. From about $145 in May to over $1200 in December, a 730% increase. This rally signaled Bitcoin’s transition from a tech circle novelty to mainstream awareness.

Price trajectory: $150 in January → $145 in May → over $1,200 in December

Market drivers:

• Media effects emerged for the first time, with BTC price increases becoming newsworthy, triggering a propagation chain
• Cyprus banking crisis sparked demand for “hard assets,” with BTC seen as an alternative
• Wealth effects from early adopters attracted more retail participants

Market crash: However, early 2014 saw Bitcoin fall below $300, a decline of over 75%. The trigger was Mt. Gox’s security breach—this platform controlled 70% of trading volume and was hacked, instantly destroying market confidence.

This cycle taught the market a lesson: infrastructure fragility can reverse a bull run in an instant.

2017: Retail Frenzy and Regulatory Awakening

The 2017 bull market was unprecedented. Bitcoin rose from about $1,000 in January to nearly $20,000 in December, a 1900% increase. Daily trading volume expanded from $200 million at the start of the year to over $15 billion by year-end.

Key catalysts:

• The ICO boom generated market enthusiasm. Startups raised funds via token issuance, attracting many newcomers
• Exchange platforms became more user-friendly (e.g., some launched easy interfaces), lowering participation barriers
• Media coverage created positive feedback—price rises → media reports → new entrants → further price increases

Regulatory disruptions: By late 2017, China banned ICOs and domestic exchanges, and the US SEC began scrutinizing market manipulation risks. These policy shocks caused rapid market shifts.

Subsequent correction: By December 2018, Bitcoin dropped to $3,200, an 84% decline from its peak. This year was dubbed the “Crypto Winter,” with many retail investors caught in losses.

The lesson from this cycle: policy risks are significant, and retail-driven bull markets often lack fundamental support.

2020-2021: Institutional Entry Changes the Game

The bull market of 2020-2021 was fundamentally different. Bitcoin climbed from $8,000 in early 2020 to over $64,000 in April 2021, a 700% increase. But this time, the main players were large institutions, not retail.

Specific institutional actions:

• MicroStrategy and other listed companies converted part of their cash reserves into BTC
• Tesla announced holding $1.5 billion worth of Bitcoin in 2021
• Grayscale’s Bitcoin Trust surpassed 1 million BTC under management
• Payment giants like PayPal entered custody services

New narrative framework: Bitcoin evolved from “digital cash” to “digital gold,” positioned as an inflation hedge. The global money supply surge triggered by COVID-19 made this argument particularly compelling.

Derivatives market maturity: Bitcoin futures launched at the end of 2020 (not spot), providing risk management tools for institutions. This reduced psychological barriers for large-scale entry.

Corrections and pressures: The mid-2021 correction of 53% (from $64K to $30K) was significant but did not reverse institutional holdings, which were viewed as a “buying opportunity,” contrasting with retail investors’ panic selling in 2018.

2024-2025: A New Starting Point for the ETF Era

The current bull cycle is unique. Bitcoin rose from $40,000 in early 2024 to around $93,000 in November (currently quoted at $87,330), a gain of over 130%. But more important than the price itself is the change in market structure.

Significance of spot ETFs:

• In January 2024, the US SEC approved spot Bitcoin ETFs (e.g., BlackRock IBIT, Fidelity, Grayscale)
• These ETFs absorbed over $10 billion in initial weeks
• By the end of 2024, cumulative net inflows into spot Bitcoin ETFs exceeded $28 billion, surpassing gold ETFs
• ETFs offer a “seamless” path for institutional allocation—no need to custody wallets or learn self-custody

Supply shocks combined:

• The April 2024 halving reduced miner rewards, easing new supply pressure
• Major holders (e.g., MicroStrategy) continued expanding holdings, locking in circulating BTC
• Exchange reserves hit record lows, indicating holders prefer long-term holding over trading

Macro backdrop: The Fed’s rate-cut cycle has strengthened risk asset preferences. Meanwhile, political shifts in the US foster expectations of crypto-friendly policies.

Current snapshot (December 2025):

• Bitcoin price: $87,330
• 24-hour change: -1.03%
• 1-year change: -12.18%
• All-time high: $126,080
• Circulating market cap: $1.74 trillion
• Market sentiment: 50% bullish / 50% bearish

Signals for Initiating a Bull Market

What indicators should investors monitor to anticipate a bull run?

Technical signals:

• RSI (Relative Strength Index) breaking above 70, indicating strong buying momentum
• Price breaking above 50-day and 200-day moving averages
• Trading volume significantly increasing (often doubling)

On-chain data:

• Exchange outflows surge (holders withdrawing coins for cold storage)
• Active addresses reaching new highs
• Whales (addresses holding over 1000 BTC) active frequently

Institutional indicators:

• Continuous positive ETF net inflows
• Futures open interest rising but not excessive
• Increase in large OTC trades

Macro triggers:

• Central bank or major economies shifting policies
• Geopolitical events shaking fiat confidence
• Inflation data exceeding expectations

Unique Aspects of the 2024 Bull Market

Compared to previous cycles, current market features:

Structural changes:

• Participants have evolved from retail + few institutions to include large asset managers, pension funds, and sovereign wealth funds
• ETF liquidity depth makes prices more coherent but also amplifies systemic shocks

Risk factors:

• Widespread high leverage, which can trigger cascading liquidations
• Extreme market sentiment—bull/bear ratio at 50% each, leading to polarization
• Regulatory uncertainties (e.g., restrictions on privacy coins, exchange capital requirements)

Positive supports:

• Government reserves may become reality (e.g., US lawmakers proposing to buy 1 million BTC over 5 years)
• Technical upgrades (like OP_CAT proposals) could expand BTC functionality
• Global inflation expectations boost asset safe-haven demand

Practical Guide for Navigating the Next Bull Cycle

1. Cognitive Preparation: Deeply study Bitcoin’s technical features and historical cycles, compare with traditional safe assets like gold, and understand its role in asset allocation.

2. Risk Planning:

   • Define investment proportion (conservative advice: no more than 5-10% of total assets)
   • Set stop-loss levels (e.g., reduce position if price falls below 20-day moving average)
   • Use dollar-cost averaging to build positions gradually

3. Exchange Selection:

   • Prefer platforms with strong regulatory backgrounds (e.g., licensed in the US with MSB, European MiFID)
   • Verify security audits and insurance coverage
   • Test withdrawal processes (confirm deposit times and fees)

4. Asset Security:

   • Use hardware wallets (cold storage) for long-term holdings
   • Keep short-term trading assets on exchanges with 2FA and withdrawal whitelist enabled
   • Avoid high leverage on any platform

5. Information Management:

   • Follow mainstream on-chain data platforms (e.g., Glassnode, IntoTheBlock)
   • Track regulatory developments from SEC, FS-Workgroup, etc.
   • Be aware of conflicts of interest in information sources (e.g., overly optimistic content from coin promoters)

6. Psychological Management:

   • Avoid chasing highs or panic selling during volatility; stick to predetermined strategies
   • Use dollar-cost averaging to smooth entry costs
   • Keep trading logs for post-analysis

7. Tax Planning:

   • Understand local tax classifications for crypto assets (some view as commodities, others as securities)
   • Keep complete transaction records (dates, prices, amounts)
   • Consult tax professionals for account structuring

Potential Catalysts for the Future

Short-term (within 6 months):

• Continued inflow into spot Bitcoin ETFs attracting pension funds
• Post-election policy clarity possibly triggering new rallies
• Technical upgrade proposals voting

Medium-term (6-18 months):

• Rising likelihood of sovereign wealth fund participation
• Further easing of global monetary policies
• Approaching next halving cycle (2028)

Long-term risks:

• Stricter energy regulations impacting mining costs
• Central bank digital currencies (CBDCs) potentially diverting demand
• Competition from alternative chains (e.g., Solana) intensifying

Conclusion: Evolution of Cycles, Not Their End

Each Bitcoin bull market signifies progress in crypto asset recognition. From the novelty in 2013, to speculative hype in 2017, to an asset class in 2021, and now institutional mainstreaming in 2024—this is not just about price increases but deep market structural changes.

The next bull cycle may look very different from current patterns. As participant maturity and infrastructure improve, volatility may decrease, but participation scale could expand. Understanding these cycles is not about timing precisely but about making rational choices in different market environments.

Whether the bull market arrives soon or later, continuous learning, disciplined operation, and psychological resilience are timeless. The story of Bitcoin is far from over.