From 2009 to 2025: Why Are Bitcoin Cycles So Crucial

The story of Bitcoin is not just about price appreciation — it is a textbook example of how market cycles, institutional adoption, and supply scarcity interact. From the all-time high approaching $93,000 at the end of 2024 to the current hovering around $87K, we are witnessing the latest evolution of the crypto cycle. But what truly matters is: understanding how these cycles operate can help investors make smarter decisions in the next big market move.

Why the 2024-2025 Bull Market Is Different

Unlike any previous period, the current Bitcoin rally is driven by a special catalyst — the approval of spot Bitcoin ETFs. In January 2024, the U.S. SEC approved the first spot Bitcoin ETFs, opening the door for institutional investors into traditional finance.

Recent data shows:

• Bitcoin surged from $40,000 at the start of 2024 to $93,000, a 132% increase
• Spot Bitcoin ETFs absorbed over $4.5 billion in funds within just a few months
• BlackRock’s IBIT fund alone holds over 467,000 BTC
• All Bitcoin ETFs combined hold over 1 million BTC

This isn’t retail hype — it’s Wall Street’s formal entry. And this institutional participation is changing the market fundamentals.

What History Tells Us: Four Key Bull Markets Review

2013: The First Wealth Dream of Small-Town Youth

Bitcoin soared from $145 to $1,200, a 730% increase. What fueled this period?

• Cyprus Banking Crisis: When the government froze bank deposits, people first truly understood the value of decentralized currency
• Low Liquidity: Few exchanges, small trading volumes, tiny demand shifts could cause wild volatility
• Media Effect: The mysterious internet hacker currency gradually entered mainstream consciousness

But this bull market ended painfully — Mt. Gox exchange collapsed in early 2014, with 70% of Bitcoin trading happening on that platform. The result? Price dropped to $300, a 75% decline. This painful lesson established a fundamental understanding: Infrastructure risk is the number one killer of crypto markets.

2017: Masses Celebrate and Regulations Clamp Down

The scene in 2017 was completely different — retail investors flooded in, and the ICO boom ignited the entire market. Bitcoin rose from $1,000 to $20,000, a 1,900% increase.

What happened that year:

• ICO Token Explosion: New projects raised funds by issuing tokens, attracting massive new capital
• Exchange Democratization: Some platforms lowered trading barriers, making it easy for retail investors
• Social Media Buzz: Telegram groups, Twitter discussions, FOMO spread widely

But after the peak came the abyss — in 2018, Bitcoin plummeted to $3,200, an 84% drop. China banned ICOs and domestic exchanges, global regulation tightened, and the market entered a bear phase.

Key Insight: Bull markets without regulatory frameworks tend to be the most violent, and their subsequent declines are the deepest.

2020-2021: Institutional Warfare Begins

If 2017 was retail’s victory, 2020-2021 marked institutional dominance. Bitcoin surged from $8,000 to $64,000 (April 2021), a 700% increase.

Driving factors included:

• MicroStrategy, Tesla, and other public companies began holding Bitcoin as treasury assets
• Grayscale Trust (despite complex processes) provided a pathway for institutions
• “Digital Gold” Narrative: Amid inflation fears and ultra-loose policies, Bitcoin was redefined as a store of value
• Bitcoin Futures Launch: Major financial institutions could finally participate via familiar derivatives markets

This time, the market was more stable overall — despite a correction (Bitcoin dipped to $30,000 in July 2021). Institutional holdings mean this is not just speculation but strategic allocation.

2024-2025 Now: Why This Time Is Most “Official”

The approval of spot ETFs changed everything. This isn’t a private hedge fund arrangement — it’s a public commitment from giants like BlackRock.

Data points:

• Capital inflow into spot Bitcoin ETFs far exceeds that of gold ETFs
• The number of publicly disclosed holdings continues to grow
• Even during the current correction (down to $87K), large institutions are still increasing their positions

What does this “officialization” mean?

Bitcoin is shifting from a “risk asset” to a “strategic allocation.” This is the most critical turning point in the crypto cycle theory.

The Three Engines of Crypto Market Cycles

1. Bitcoin Halving Cycles

Every 4 years, the Bitcoin network halves the rate of new coin issuance — embedded in its monetary policy.

Historical data shows:

• Post-2012 halving: +5,200%
• Post-2016 halving: +315%
• Post-2020 halving: +230%
• Post-2024 halving: +132% (so far)

Trend: The gains after each halving are decreasing — reflecting market maturation. Early halvings were like stones dropped into a pond causing big ripples; now they are more like gentle waves in a vast ocean.

Why are halvings effective? Basic economics — supply reduction with stable or increasing demand drives prices up. But as the market grows, this effect diminishes.

2. Institutional Adoption

• 2020: MicroStrategy becomes the first listed company to hold Bitcoin
• 2021: Tesla, Square follow suit; gold ETF funds start increasing holdings
• 2024: Spot Bitcoin ETF approved, with hundreds of billions in assets

Each layer of recognition opens new capital gates. The key role of spot ETFs is lowering the entry barrier — pension funds, sovereign wealth funds, insurance companies can now participate through traditional channels.

3. Regulatory Clarity

This might be the most underestimated factor.

• 2013: No one knew how regulators would treat Bitcoin
• 2017: Governments began acting, but policies were chaotic
• 2024: The U.S. has a relatively clear framework, others are following

When regulation is clear, institutional confidence grows. When institutions enter, retail investors tend to follow. This creates an upward spiral.

When Will the Next Bull Market Arrive? Key Signals to Watch

Technical Indicators

RSI (Relative Strength Index): When RSI breaks above 70, it usually signals strong buying. In late 2024, Bitcoin’s RSI briefly exceeded 70 but has since retreated, indicating a market correction.

Moving Averages: The golden cross of the 50-day and 200-day moving averages is a classic bullish signal. If Bitcoin can stabilize above $90K, this signal becomes even stronger.

On-Chain Data

• Exchange Balances: When Bitcoin flows out of exchanges, it often indicates long-term holders accumulating — a bullish sign
• Stablecoin Inflows: Large inflows of stablecoins (USDT, USDC) suggest “dry powder” ready to enter
• Whale Activity: Tracking large holders’ movements can hint at market shifts

Macro Factors

• Federal Reserve Policies: Rate cut cycles generally favor Bitcoin
• Geopolitical Uncertainty: Heightened risk aversion boosts safe-haven assets
• Gold Performance: As a traditional safe-haven, gold’s strength often foreshadows Bitcoin’s rally

Preparing for the Next Wave: Practical Checklist

Step 1: Build Your Knowledge Framework

Don’t just watch prices — understand:

• The significance of Bitcoin’s 21 million cap
• How halving events influence supply dynamics
• Why ETFs are game-changers

Step 2: Choose Your Entry Method

• Long-term Holders: Buy spot Bitcoin and store in self-custody wallets (like Ledger hardware wallets)
• Institutional Investors: Participate via spot Bitcoin ETFs (no need to manage private keys)
• Traders: Use reputable exchanges with technical analysis tools

Your choice depends on your risk tolerance, time horizon, and expertise.

Step 3: Risk Management Is Essential

• Stop-loss Orders: Set 5-10% stops to prevent catastrophic losses
• Position Sizing: Don’t allocate all funds to Bitcoin; diversify assets
• Dollar-Cost Averaging (DCA): Avoid trying to perfectly time the bottom; invest periodically

Step 4: Keep Learning Market Signals

Subscribe to authoritative news sources, track:

• SEC and other regulators’ announcements
• Major institutional holdings reports
• Technical updates from Bitcoin developers

Step 5: Tax Planning

Crypto gains are taxable in most jurisdictions. Consult tax professionals early to avoid issues later.

Underappreciated Technological Progress: OP_CAT Upgrade

Bitcoin is about to undergo a significant technical upgrade — restoring an opcode called OP_CAT. While it sounds technical, its impact could be enormous.

Simply put: OP_CAT will enable Bitcoin to handle more complex transactions, including Layer 2 scaling solutions. This means:

• Bitcoin’s transaction throughput could rise from 7 per second to thousands
• DeFi applications could run directly on Bitcoin (not just Ethereum)
• Use cases for Bitcoin could expand dramatically

This not only enhances technical capacity but also broadens Bitcoin’s value narrative — from a pure “store of value” to a “comprehensive financial infrastructure.”

Government-Level Adoption: New Demand Drivers

A recent shift that’s often overlooked: Governments are starting to treat Bitcoin as a strategic reserve.

• El Salvador: Adopted Bitcoin as legal tender in 2021, holding about 5,875 BTC
• Bhutan: Through the state investment company Druk Holding & Investments, holds over 13,000 BTC
• U.S. Senator Cynthia Lummis: Proposed that the U.S. Treasury buy 1 million BTC over five years

If even one of these initiatives materializes fully, the impact on Bitcoin demand would be exponential. Imagine: if the U.S. decided to include Bitcoin in its foreign exchange reserves, what would happen?

Beware of Risks: This Time Is Different, But Risks Remain

Market Volatility Risk

Bitcoin remains highly volatile. It’s at $87K now, but a short-term drop back to $70K or lower is possible.

Regulatory Risks

While the U.S. framework is relatively clear, attitudes in other major economies (EU, China) could change. A single harsh regulatory statement can trigger panic.

Environmental Pressure

Bitcoin mining’s energy consumption remains a political target. ESG-focused investors might avoid Bitcoin due to environmental concerns.

Technical Security

While the Bitcoin network itself is secure, surrounding infrastructure (exchanges, wallets, ETFs) still requires caution. Choosing platforms with strong security records is crucial.

Summary: The Evolution of Crypto Cycles

Bitcoin’s journey from a 2009 geek experiment, through the small-town craze of 2013, the mass rally of 2017, to institutional recognition in 2024 — it’s a progression from speculation to investment.

Each cycle is more mature:

• Volatility decreases
• Institutional participation increases
• Infrastructure improves
• The story of value is upgrading

This doesn’t mean Bitcoin will become dull — on the contrary, it’s becoming part of the global financial system.

When will the next bull market arrive? Maybe at the next halving (2028), maybe triggered by an unexpected geopolitical black swan, or perhaps when the U.S. government officially adopts Bitcoin as a reserve asset.

The key is: Be prepared, stay vigilant, keep learning. Those who truly profit from Bitcoin cycles are often not the smartest but the most patient.