Cryptocurrency Bull Market Cycle Evolution: From Early Surge to Institutional Deployment

Bitcoin, as the world’s largest cryptocurrency asset, has experienced multiple rounds of intense price fluctuations and market cycles since its inception in 2009. Behind each rally lie unique market drivers and industry shifts. Currently, with the approval of spot Bitcoin ETFs in 2024 and the fourth halving event driving the market, a new upward cycle has already begun—BTC has surged from around $40,000 at the start of the year to $89,010, creating a new chapter in the crypto market. Understanding these cyclical patterns is crucial for assessing whether the “crypto bull market has already started.”

What Drives Bitcoin’s Cyclical Rises

Bitcoin’s bull cycles refer to prolonged periods of rising prices, typically driven by several key factors:

Supply Shock from Periodic Halving Events

One of Bitcoin’s most important features is its fixed total supply of 21 million coins. Every four years, a halving reduces the mining reward by half, directly tightening supply. Historical data shows this supply shock often triggers sharp price reactions:

• After 2012 halving, BTC rose 5,200%
• After 2016 halving, BTC increased 315%
• After 2020 halving, BTC gained 230%
• Post-April 2024 halving, the upward trend continues

Surge in Institutional Recognition

From 2013 to 2017, Bitcoin was mainly driven by retail investors and tech enthusiasts. Post-2020, large-scale institutional entry has transformed the market structure. Companies like MicroStrategy and Tesla have added BTC as a reserve asset, marking a shift from “speculative asset” to “strategic asset.” The launch of spot ETFs in 2024 further opened the door to traditional finance—by November, Bitcoin ETFs attracted over $4.5 billion in capital, with BlackRock’s IBIT holding over 467,000 BTC.

Increased Policy and Regulatory Certainty

In 2024, the U.S. SEC’s official approval of spot Bitcoin ETFs cleared compliance hurdles for institutional investors. Meanwhile, policies favoring crypto-friendly regulation, such as those under Trump’s administration, further boost market confidence. This shift from “uncertainty” to “clarity” is often a key signal of a bull market’s onset.

Historical Bull Market Cycles Review

2013: The Initial Explosive Growth

2013 marked Bitcoin’s first exposure to the mainstream. Starting at about $145 in May, it approached $1,200 by December, a 730% increase. Key drivers included:

Safe-Haven Demand from Cyprus Banking Crisis—In 2013, Cyprus faced a financial crisis, with some depositors’ funds frozen, highlighting to global investors that centralized finance could fail in extreme situations, and decentralized Bitcoin could serve as a new store of value.

Media Attention Explosion—The rapid price increase drew widespread coverage from mainstream outlets, creating a self-reinforcing cycle of rising interest.

However, early 2014 saw Mt. Gox hacked (then handling about 70% of global Bitcoin trading), causing prices to plummet below $300, a drop of over 75%. This event deeply impacted market confidence and led to a prolonged bear market.

2017: Retail Frenzy and ICO Bubble

The 2017 bull run was highly retail-driven. BTC rose from $1,000 in January to nearly $20,000 in December, a 1,900% increase. Main factors included:

Booming ICOs—Thousands of projects raised funds via ERC-20 tokens, attracting massive retail FOMO (Fear of Missing Out). This enthusiasm spilled over into Bitcoin, fueling speculative buying.

Enhanced Exchange Accessibility—More user-friendly platforms launched, lowering entry barriers and attracting retail investors.

Surge in Daily Trading Volume—From $200 million daily at the start of the year to $15 billion by year-end, indicating extreme participation.

However, in 2018, China banned ICOs and shut down domestic exchanges, coupled with global regulatory scrutiny, bursting the bubble. BTC fell from nearly $20,000 to $3,200 within a year—a decline of 84%.

( 2020-2021: Institutional Adoption and “Digital Gold” Narrative

This period is considered a “turning point” in crypto history. BTC rose from $8,000 in early 2020 to $64,000 in April 2021, a 700% increase.

New Narrative of Value—Bitcoin was increasingly seen not just as a speculative asset but as “digital gold” for inflation hedging. Amid massive liquidity injections by central banks and fiat devaluation pressures, BTC’s fixed supply became highly attractive.

Corporate Adoption Wave—MicroStrategy led the way, followed by Square, Tesla, and others. By late 2021, public companies held over 125,000 BTC, worth nearly $5 billion.

Development of Futures and Derivatives—Approval of Bitcoin futures in late 2020 and the launch of Canadian spot ETFs in 2021 provided regulated channels for institutional participation.

Mid-2021, the cycle faced a correction, with BTC retracing from $64,000 to $30,000 (a 53% drop), but then rebounded to nearly $69,000, setting new all-time highs.

) 2024-2025: ETF Era and Supply Tightening

The current cycle features unprecedented institutional dominance. BTC surged from $40,000 at the start of the year to $89,010, with a peak of $126,080.

Revolutionary Impact of Spot ETFs—In January 2024, the SEC approved spot Bitcoin ETFs, breaking the last barrier for institutional entry. Now, pension funds, mutual funds, insurers, and other traditional institutions can hold Bitcoin via familiar ETF structures without managing custody or security themselves.

Liquidity Transformation—Within 10 months of ETF launch, net inflows exceeded $4.5 billion, outpacing gold ETFs’ growth in the same period, making it the fastest-growing new fund type in the U.S.

Supply-Side Dual Tightening:

1. The April halving directly reduces new coin issuance.
2. Institutions like MicroStrategy continue to “feed” BTC, locking large amounts in long-term holders, shrinking circulating supply.

Political Favorability—Policies under Trump lean toward crypto-friendly, environmentally conscious regulation. The 2024 Bitcoin Act proposed by Senator Cynthia Lummis even suggests the U.S. Treasury acquire 1 million BTC over five years as strategic reserves, further elevating Bitcoin’s status as a “national asset.”

Key Signals That Indicate the Bull Market Has Begun

On-Chain Data Confirmation

Surge in Wallet Activity—A noticeable increase in new active addresses in the short term indicates fresh capital entering the market.

Accelerated Exchange Outflows—Investors withdrawing BTC from exchanges to personal wallets often signal long-term holding intentions, a bullish sign. Increased stablecoin inflows also suggest accumulating buying power.

Accumulation by High-Net-Worth Addresses—Data shows “whale” wallets holding over 1,000 BTC are increasing their holdings in 2024, often a sign of market bottom formation.

Technical Breakthroughs

RSI Breakouts—When the 14-period RSI exceeds 70, it typically signals strong upward momentum. Since 2024, BTC’s RSI has repeatedly hit 78–85, confirming sustained buying pressure.

Golden Cross of Moving Averages—The 50-day moving average crossing above the 200-day (golden cross) is a classic bullish signal. BTC achieved this setup early 2024, followed by continued gains.

Breakthrough of Historical Resistance Levels—Surpassing $80,000 and breaking the 2021 high of $69,000 indicates trend confirmation.

Macro-Level Support

Global Liquidity Environment Improvement—Hints of rate cuts or easing by central banks reinforce the “low interest rate environment drives capital seeking yield” logic, benefiting risk assets like Bitcoin.

Geopolitical Safe-Haven Demand—International tensions and currency devaluation risks push capital toward “neutral, non-sovereign” assets like Bitcoin, which benefits from its decentralized nature.

Regulatory-Friendly Policies—Governments shifting from suppression to acceptance or encouragement, as seen in the U.S., El Salvador, Bhutan, and others, provide certainty premiums for Bitcoin.

Case Studies: Bhutan and El Salvador’s Strategic Holdings

Two countries’ official Bitcoin reserve policies offer interesting comparisons:

Bhutan—Through its national investment arm, Druk Holding & Investments, Bhutan has accumulated over 13,000 BTC, ranking among the top government holders globally. This Himalayan nation views BTC as part of its treasury assets to hedge foreign exchange and inflation risks.

El Salvador—In 2021, El Salvador made BTC legal tender, accumulating over 5,875 BTC. Despite short-term policy fluctuations, the government’s strategic commitment to holding BTC remains firm.

These cases show even small nations recognize Bitcoin’s strategic value—this reinforces the likelihood of larger nations (notably the U.S.) adopting similar policies eventually.

Future Cycle Catalysts and Risks

New Growth Drivers

1. Large-Scale Government Reserves

If the Bitcoin Act passes in the U.S., it would mark the official acquisition of BTC by the world’s leading reserve currency issuer. This could trigger a chain reaction—other central banks might follow suit, sparking a new wave of institutional competition.

2. Technological Upgrades Unlocking New Potential

Restoration of OP_CAT code (if community consensus is reached) could enable Layer-2 scaling and DeFi functionalities, transforming Bitcoin from a “store of value” to an “smart contract platform.” This would expand BTC’s use cases and attract capital currently flowing into Ethereum.

3. Expansion of Derivative Instruments

Post-ETF, development of BTC options ETFs, synthetic leveraged products, and more will lower barriers for institutional participation, attracting conservative investors.

( Potential Risks and Corrections

Macro Tightening Reversal—If the Fed resumes rate hikes or geopolitical conflicts cause risk asset sell-offs, BTC could face rapid corrections. Past 20-30% adjustments often stem from macro black swans.

Regulatory Surprises—While current policies are friendly, sudden harsh measures (e.g., bans on trading or mining) in major jurisdictions could trigger market shocks. China’s 2021 mining ban caused significant volatility.

Overheated Valuations and Retail FOMO—Rapid price increases can lead retail-driven bubbles, with social media spreading FOMO, often culminating in sharp corrections. The 2017 ICO craze is a prime example.

Energy and ESG Concerns—Despite exaggerations about Bitcoin’s energy use, ongoing ESG investor resistance to “high energy consumption assets” could limit institutional allocations.

Practical Steps to Prepare for the Next Bull Run

) Step 1: Solidify Fundamental Knowledge

Deepen Understanding of Bitcoin Mechanics—Know not just “what happened,” but “why.” Study the whitepaper, understand UTXO models, grasp halving math, and internalize these concepts to stay rational amid volatility.

Review Past Cycles—Compare 2013, 2017, 2021 cycles to identify common signals at start, acceleration phases, overheating, and corrections. This historical perspective enhances timing skills.

Step 2: Build a Clear Investment Plan

Define Your Role—

• Long-term holder: Focus on yearly allocations, avoid daily fluctuations
• Cycle trader: Use technical analysis for 2-3 month trends
• Short-term trader: Capture quick rebounds on 4-hour charts

Set Risk Budget—Decide maximum acceptable loss percentage. For example, if risk tolerance is 15%, set stop-loss at around $75,650 when BTC is at $89,010.

Diversify and Avoid All-In—Even bullish on BTC, allocate funds across other cryptos (ETH, SOL) and traditional assets (stocks, bonds). Diversification remains a core risk management principle.

Step 3: Choose Compliant Trading Channels

Prefer Regulated ETFs or Funds—For most retail investors, buying via official spot ETFs is simplest, avoiding custody risks.

If Trading Directly, Use Licensed Exchanges—Verify regulatory licenses, security track record, customer support. Prioritize platforms with cold storage, regular audits, and insurance.

Step 4: Practice Security Best Practices

Use Hardware Wallets for Long-Term Storage—Ledger, Trezor offline wallets keep private keys isolated, greatly reducing theft risk. Safeguard seed phrases carefully.

Enable 2FA and Whitelist Withdrawal Addresses—Two-factor authentication and address whitelists prevent unauthorized access and withdrawals.

Step 5: Stay Informed

Follow Official Channels, Not Rumors—Announcements from Bitcoin Core developers, Fed decisions, SEC statements are key info sources.

Beware of Social Media “Whale Calls”—Accounts promising “sure profits” or “buy with me, I’ll make you rich” are often scams. Make decisions based on independent analysis.

Step 6: Cultivate Disciplined Trading Habits

Avoid Emotional Decisions—Greed during rallies and fear during dips cause losses. Stick to pre-set stop-loss and take-profit plans.

Use Limit Orders, Not Market Orders—Set buy orders at key levels (e.g., $85,000, $90,000) to avoid chasing highs. Similarly, set sell orders at targets to lock in gains.

Step 7: Understand Tax and Compliance Obligations

Tax Rules Vary by Jurisdiction—In the U.S., capital gains tax applies; Singapore may exempt; Japan taxes based on income brackets. Consult local tax professionals.

Keep Complete Records—Document each trade’s time, price, amount, and fees for annual reporting. Most exchanges offer CSV statements for easy bookkeeping.

Step 8: Engage with the Community and Keep Learning

Participate in Open-Source Discussions—Bitcoin Stack Exchange, global crypto forums provide cutting-edge technical insights.

Attend Industry Conferences and Seminars—Virtual or physical, these events expand networks and provide firsthand information.

Conclusion: When Will the Next Bull Cycle Arrive?

Accurately predicting Bitcoin’s next peak is impossible, but historical patterns offer probabilistic guidance:

Halving Cycles—The fifth halving is expected around 2028. Historically, the peak occurs 6–12 months after halving.

ETF Asset Under Management (AUM) Thresholds—When Bitcoin ETF AUM exceeds $50 billion, it often signals institutional saturation and approaching cycle top.

Policy Catalysts—If the U.S. officially advances the Bitcoin Act in 2025, announcing government purchases, it could instantly shift market expectations and trigger a new rally.

Current data indicates that the crypto bull market is indeed underway:

• Institutional holdings continue to grow (ETF inflows over $4.5 billion)
• On-chain whale accumulation persists
• Technical indicators confirm an upward trend
• Policy support is strengthening
• Supply is tightening due to halving

However, this does not mean a straight line up. Past bull markets experienced 20–40% corrections along the way. Smart investors will accumulate during these dips rather than panic-sell.

Whether you’re a newcomer or a seasoned veteran, the current environment offers relatively clear opportunities. The key is to prepare well, manage risks, and stay disciplined—then the next cycle’s gains will belong to those who are ready.

Stay alert, monitor supply shortages, institutional inflows, and regulatory developments—these are the three key indicators to seize the long-term opportunities in Bitcoin’s ongoing evolution amidst volatility.