From the 2021 bull market to today: Understanding Bitcoin cycles and future opportunities

Bitcoin, as the leader among crypto assets, has experienced multiple spectacular cyclical surges and corrections since its inception in 2009. From breaking the $1,000 mark for the first time in 2013, to reaching $20,000 in 2017, and then hitting $69,000 during the 2021 bull run, each bull market has had clear driving forces behind it. Today, with BTC hovering around $88,900 (latest data), and its all-time high reaching $126,080, understanding these cyclical patterns is crucial for investors to seize the next wave of market opportunities.

What are the core drivers of Bitcoin’s bull markets?

Supply Pressure and Market Expectations Collide

The essence of Bitcoin’s bull runs stems from the combination of halving events and increasing demand. Every four years, the halving reduces miners’ rewards by half, directly constricting new supply. Historical data shows that after the 2012 halving, BTC surged by 5200%; after 2016, it increased by 315%; and following 2020, it rose by 230%. This rigid supply-side change often acts as a key catalyst for price appreciation.

Turning Point in Institutional Recognition

The 2021 bull run marked a significant shift—from retail speculation to institutional allocation. Public companies like MicroStrategy and Tesla made large-scale BTC purchases, indicating a fundamental change in traditional finance’s attitude toward digital assets. During this cycle, BTC soared from $8,000 (early 2020) to $64,000 (April 2021), a 700% increase, driven mainly by the influx of institutional capital.

Gradual Improvement of Regulatory Frameworks

In January 2024, the U.S. SEC approved a spot Bitcoin ETF, a milestone event. The launch of ETFs allows traditional investors to participate without directly holding BTC, leading to a surge in institutional inflows. By November 2024, cumulative Bitcoin ETF fund inflows exceeded $4.5 billion, with BlackRock’s IBIT fund alone holding over 467,000 BTC. This compliant pathway effectively lowers the barriers for institutional investment.

Landmark moments in previous bull markets

2013: The Grassroots Awakening

From May to December 2013, BTC rose from $145 to $1,200, a 730% increase. This rally was fueled by the Cyprus banking crisis, which triggered a safe-haven demand, and the first large-scale dissemination of Bitcoin as an “uncensorable asset.” However, in 2014, the Mt. Gox exchange bankruptcy caused BTC to fall to $300, a drop of over 75%, giving early investors a taste of high volatility.

2017: Retail Boom and ICO Frenzy

2017 saw the first mass adoption wave of crypto assets. BTC started at $1,000 and surged by 1900% to reach $20,000. The driving forces were the ICO (Initial Coin Offering) craze and social media amplification. Daily trading volume skyrocketed from less than $200 million at the start of the year to $15 billion by year-end. But this was followed by a deep correction in 2018, with BTC dropping to $3,200—a decline of 84%—which remains a collective memory for a generation of investors.

2021 Bull Run: The Institutional Turning Point

The 2021 rally was qualitatively different. Starting at $8,000, BTC hit $64,000 in April and eventually set a new high of $69,000 at year-end. Unlike previous cycles driven mainly by retail, this wave involved publicly traded companies. MicroStrategy accumulated over 125,000 BTC; giants like Square and PayPal announced support for Bitcoin transactions. The Fed’s ultra-low interest rates and fiscal stimulus measures led investors to view BTC as a hedge against inflation, often calling it “digital gold.”

Current market and new upward cycle

Features of 2024-2025

Currently, BTC is priced at $88,900, with a 0.37% increase in the past hour and a 1.53% rise over 24 hours. Although about 30% below its ATH of $126,080, market sentiment remains balanced (50% bullish, 50% bearish), indicating potential upward momentum.

This bull cycle’s drivers differ markedly from previous ones:

• Scale effect of spot ETFs: Post-approval of Bitcoin ETFs in the U.S., capital inflows have created a new demand foundation. Rather than being a playground for speculators, ETFs are becoming a standard component of asset allocation.

• Bitcoin as a national reserve asset experiment: El Salvador has incorporated 5,875 BTC into its national reserves, and Bhutan’s sovereign investment company holds over 13,000 BTC. Such government-level participation suggests Bitcoin may evolve from an “investment asset” to a “state asset.”

• The re-emergence of the four-year halving cycle: The upcoming fourth halving in April 2024 will once again tighten supply, laying the groundwork for the next upward phase.

How to capture the next bull market opportunity

Step 1: Establish a systematic monitoring framework

Key indicators include: RSI breaking above 70, golden crosses of the 50-day and 200-day moving averages, rising on-chain wallet activity, increased BTC outflows from exchanges (indicating accumulation intent), etc. When these technical signals align, they often herald a new upward momentum.

Step 2: Choose compliant trading channels

For long-term holdings, selecting reputable exchanges supporting spot BTC trading is fundamental. Platforms like Gate.io offer user-friendly interfaces, robust security systems (including 2FA), and rich trading tools. For large holdings, hardware wallets (Ledger, Trezor) are safer options to mitigate exchange risks.

Step 3: Rational allocation and risk management

Every bull market is accompanied by speculative bubbles. Setting stop-loss orders, staggering purchases, and using moderate leverage instead of full exposure are essential risk management practices often overlooked. Investors who entered late in the 2021 bull market suffered significant losses during the correction—an eternal lesson.

Step 4: Keep an eye on policy and macro signals

Bitcoin’s price is influenced by crypto regulation policies, central bank interest rate decisions, and geopolitical events. For example, Fed rate cuts tend to favor risk assets including BTC, while tightening regulations may have the opposite effect. Staying sensitive to policy developments helps investors avoid risks or seize opportunities early.

Three key points on Bitcoin’s future

On-chain technological upgrades empowering the network

Upgrades like OP_CAT could significantly enhance on-chain computing capabilities, supporting DeFi applications. Once BTC becomes a truly programmable asset rather than just a store of value, its application scenarios and investment appeal will expand exponentially. This will attract not only traditional DeFi users but also redefine Bitcoin’s role in digital finance.

Long-term trend of national reserves

If major economies like the U.S. and EU follow El Salvador and Bhutan by including Bitcoin in their foreign exchange reserves, it would fundamentally alter the supply landscape. Senator Cynthia Lummis’s proposed BITCOIN Act of 2024 advocates for the U.S. Treasury to purchase 1 million BTC within five years—if enacted, it would be a game-changing event reshaping the global reserve asset map.

Positive cycle of institutional holdings and liquidity

The continuous growth of spot ETFs and deepening institutional allocations are establishing “bottom liquidity” for Bitcoin markets. Unlike short-term retail speculation, institutional inflows represent long-term recognition, helping to stabilize extreme volatility and laying a foundation for orderly future rises.

Why the 2021 bull run deserves a fresh look

The 2021 bull market was not just about price increases but marked Bitcoin’s transition from a fringe asset to a mainstream financial asset. That year, CEOs of top U.S. listed companies regarded buying Bitcoin as a strategic decision, elevating it to an official component of institutional asset allocation.

From a technical perspective, on-chain data during the 2021 bull run showed that large holders (whales) kept accumulating rather than selling, contrasting sharply with the retail-driven high positions in 2017. This structural change suggests that the next correction may not see a 90%+ decline like 2018, but rather a more rational, supported correction.

Where is the next opportunity window?

While precise timing is impossible, key event timelines are clear:

• First half of 2025: The U.S. may push forward with BITCOIN Act legislation, which, if passed, will unleash huge demand.
• 2028: The fifth Bitcoin halving, historically associated with a new bull cycle.
• Ongoing ETF expansion: The assets under management of spot Bitcoin ETFs still have significant room to grow, especially in Europe and Asia.

Currently, BTC is at $88,900, still below the ATH of $126,080. Based on past cycles, as long as supply remains constrained and institutional demand persists, Bitcoin’s long-term trend remains upward.

Final warnings and advice

Bitcoin’s history is full of drama—from obscurity to global attention, from extreme volatility to gradual maturity. Regardless of market evolution, the following principles are timeless:

Don’t chase highs. Every late-stage bull run is driven by FOMO (fear of missing out), leading to irrational buying. The crashes at the end of 2017 and 2021 serve as lessons.

Learn to cut losses. Instead of trying to bottom fish, set reasonable stop-loss points to protect your capital. Risk management is always a prerequisite for gains.

Monitor multiple dimensions. Don’t focus solely on price charts; pay attention to on-chain metrics (address activity, exchange flows), macro factors (interest rate policies, regulation), and technological developments (layer-2, smart contract upgrades).

Maintain a long-term perspective. If you believe in Bitcoin’s future, the 2021 high is not the end but a midpoint. History shows that every correction prepares for the next surge.

When will Bitcoin’s next bull run arrive? The answer lies in the data, policies, and inflows of institutional capital. The key is whether you are already prepared.