Bitcoin: From Newcomer in the Crypto World to Main Player in Traditional Finance

Bitcoin has been playing a “roller coaster” of ups and downs. From an unknown rookie in 2009 to a giant with a market cap of $1.7 trillion today, each cycle behind it hides different driving forces. Currently, BTC is hovering around $87.19K, and the market is waiting for the next turning point. So, what can history tell us?

Why This Cycle Is Different

The 2024-25 Bitcoin bull market is fundamentally different from previous ones. It’s not retail FOMO, not media hype, but real money from Wall Street.

After the US SEC approved a spot Bitcoin ETF in January, institutional funds flooded in. By November, ETF inflows exceeded $45 billion. BlackRock’s IBIT fund holds over 470,000 BTC, accounting for 2.3% of the total global BTC supply. This is beyond what retail investors can achieve.

More importantly, the April Bitcoin halving further tightens supply. Mining rewards decreased from 6.25 BTC to 3.125 BTC, halving the new supply. History shows that within 6-12 months after each halving, Bitcoin tends to reach new highs.

From 2013 to the 2017 Frenzy

In 2013, Bitcoin soared from $145 in May to $1,200 in December, a 730% increase. It was an era of wildness—Cyprus banking crisis made people see Bitcoin as a “safe haven asset” for the first time. But the Mt. Gox collapse shattered that dream, causing Bitcoin to plummet 75%, and the market entered a 3-year bear market.

2017 was a retail carnival. The ICO craze swept the crypto world, newcomers flooded in, and BTC rose from $1,000 to nearly $20,000, a 1900% increase. Daily trading volume skyrocketed from $2 million to $15 billion. But regulatory crackdowns (especially China’s ban on ICOs and exchanges) ended this feast, and BTC fell back to $3,200 in 2018, an 84% decline.

Both cycles share a common point: driven by retail investors and ending in crashes.

2020-2021: Institutional Entry Changes the Game

COVID-19 changed everything. Central banks around the world flooded the markets, and the Federal Reserve cut interest rates to zero. Investors panicked: with so much money being printed, will my assets depreciate?

Bitcoin’s story as “digital gold” started gaining popularity. Listed companies like MicroStrategy and Tesla began buying BTC as part of their asset allocation. By April 2021, BTC surged from $8,000 to $64,000, a 700% increase. This time, institutional participation made the rally less wild and more supported.

Key data: By 2021, corporate holdings of Bitcoin exceeded 125,000 coins, with institutional inflows surpassing $10 billion.

2024-25: The Dawn of a New Era

What stage is the current Bitcoin bull market in? From multiple perspectives, it’s very different:

Regulatory Recognition: The approval of a spot ETF by the US SEC marks a historic turning point. It’s not just an investment tool; it’s a formal acknowledgment of Bitcoin by traditional finance.

Supply Constraints: BTC has a fixed supply of 21 million coins, halving every 4 years. As mining declines and institutions hoard, circulating BTC becomes increasingly scarce. On-chain data shows exchange-held BTC hitting record lows.

Policy Expectations: The Trump administration’s friendly stance toward crypto, and even proposals for the US Treasury to buy 1 million BTC as strategic reserves, could significantly boost demand if realized.

Technological Improvements: The Bitcoin network may upgrade with OP_CAT support, enabling Layer-2 scaling solutions. This could make BTC not just “digital gold” but also a foundation for DeFi infrastructure.

Signals for the Next Cycle

To buy the dip or sell the top, you need to learn to read signals:

Technical Analysis: RSI above 70 indicates strength but also risks of correction. Crossovers of the 50-day and 200-day moving averages often signal trend changes. Breaking key resistance levels (like 80K, 100K) can trigger new buying waves.

On-Chain Data:

• Net outflows from exchanges suggest accumulation by large holders (bullish)
• Increased stablecoin inflows into exchanges indicate potential buying (bearish signal)
• Whale wallets (addresses holding 1000+ BTC) are highly indicative of market moves

Macro Factors:

• Expectations of Fed rate cuts → bullish for BTC
• US dollar appreciation → bearish for BTC
• Geopolitical risks → boost safe-haven assets (BTC benefits)

Hidden Risks That Cannot Be Ignored

Every bull market has seen big losses beforehand. This cycle is no exception:

Leverage Liquidations: Futures markets on exchanges have accumulated leverage of dozens of times, and even a 10% move can trigger cascading liquidations. Several have occurred in 2024 already.

Policy Reversals: If the US suddenly imposes heavy taxes on Bitcoin mining or a major country bans trading, the market could reverse instantly.

Technical Risks: While the BTC network is stable, it still requires community consensus upgrades. Failed upgrades could cause splits.

Valuation Bubbles: With a market cap of $1.7 trillion, Bitcoin’s growth rate is likely to slow. It’s easy to go from $87K to $100K, but increasingly difficult to rise from $100K to $150K.

Strategies for Different Types of Investors

Long-term Holders: Don’t be swayed by short-term volatility. The logic of institutional participation and supply tightness remains unchanged. BTC as “digital gold” will become more solidified. A four-year cycle suggests buying now and selling in 2028.

Swing Traders: Focus on technical charts and on-chain anomalies. Support at 80K-85K, resistance at 95K-100K. Operating within this range can control risk.

Beginners: Dollar-cost averaging (DCA) is the safest. No need to worry about timing—invest a fixed amount monthly to diversify risk. Long-term returns won’t be bad.

Summary: Where Will This Cycle Peak?

No one can predict exactly, but from a fundamental perspective, BTC still has room to rise from its historical highs. Current institutional inflows, policy support, and supply constraints are all positive factors.

Two key events to watch:

1. Will the Trump administration actually enable the US to acquire millions of BTC?
2. Will Bitcoin Layer-2 solutions truly land and bring new use cases to the ecosystem?

If both happen, breaking $150,000 is not a dream. But conversely, if any of these events turn unpredictable, the bull market could end earlier.

The current Bitcoin market is no longer a gambler’s game but an institutional arena. Participants need to understand macro trends, master technical analysis, and most importantly, manage risks. The winners of the next cycle will not rely on luck but on knowledge.