Bitcoin Bull Cycle: From Scarcity to Institutional Adoption

Bitcoin has gone through several phases of spectacular expansion since its inception, each bringing its own dynamics and lessons for the market. These cycles are not the result of chance—they respond to specific catalysts: halving events reducing supply, major regulatory approvals, institutional entries. By examining these successive waves, we better understand the mechanisms driving prices and preparing for the next recoveries.

2013-2014: The Market’s First Convulsions

Bitcoin experienced its first public explosion in 2013, rising from $145 in May to over $1,200 in December. A 730% gain that captured media attention and early adopters. This surge was built on several pillars: increasing media coverage, bank instability in Cyprus pushing some toward decentralized assets, and the emergence of a primitive exchange infrastructure.

But 2013 also revealed vulnerabilities in an ecosystem still fragile. The collapse of Mt. Gox—handling about 70% of Bitcoin transactions at the time—in 2014 triggered a 75% drop, bringing prices below $300. This crisis highlighted risks of concentration and lack of secure custody. Yet, it was not fatal: Bitcoin recovered, laying the groundwork for a more resilient infrastructure.

2017: When Retail Enters the Scene

The 2017 rally remains etched in memory. Bitcoin went from $1,000 in January to nearly $20,000 in December—a 1,900% jump. This time, the players were no longer just tech enthusiasts: it was the crowd, fueled by the ICO frenzy—fundraising via new tokens—, easier access to exchanges, and unprecedented media coverage.

Daily volume exploded, from less than $200 million at the start of 2017 to over $15 billion by year’s end. But like any speculative bubble, a correction followed: by late 2018, Bitcoin had collapsed 84%, testing $3,200. Regulators, notably the US SEC and Chinese authorities, expressed concerns. China even banned exchanges and ICOs. This period marked the shift from a libertarian market to one under surveillance.

2020-2021: The Arrival of Giants

The 2020-2021 cycle was fundamentally different. Bitcoin soared from $8,000 in early 2020 to $64,000 in April 2021 (+700 %). But this time, it wasn’t just retail traders pushing: it was institutions.

MicroStrategy, Tesla, Square, and other publicly traded giants allocated substantial portions of their balance sheets to Bitcoin. By 2021, institutional holdings exceeded 125,000 BTC. Bitcoin futures (approved at the end of 2020) and Bitcoin ETFs outside the US provided new investment channels. The narrative also shifted: Bitcoin was no longer just a technological curiosity but a “hedge against inflation” amid zero interest rates and massive stimulus measures.

Environmental concerns emerged—mining consumes a lot of energy. But they only temporarily slowed the momentum. This cycle cemented Bitcoin’s position as a mainstream financial asset.

2024-2025: ETFs Change the Game

The current cycle, which began in late 2023 and accelerated in 2024, responds to a new dynamic. In January 2024, the US SEC finally approved spot Bitcoin ETFs—a major turning point. For the first time, traditional investors could gain exposure to Bitcoin via regulated products, frictionless as buying a gold ETF.

The result? Net inflows into Bitcoin ETFs exceeded $28 billion in 2024. BlackRock alone manages over 467,000 BTC via its IBIT ETF. All Bitcoin ETFs combined hold over 1 million BTC. Bitcoin rose from $40,000 in January to near $93,000 in November 2024.

Meanwhile, the fourth Bitcoin halving in April 2024 cut the block reward, creating a scheduled scarcity. Historically, halvings trigger speculative bubbles: after 2012 halving, price increased by 5,200%; after 2016, by 315%; after 2020, by 230%.

On-chain data confirm the bullish trend: massive accumulation, stablecoins flooding exchanges to buy, exchange reserves decreasing. Updated data show Bitcoin at $87.24K, a slight retreat (-1.40% over 24h) but close to all-time highs of $126.08K. The market is breathing after a meteoric rise.

Recognizing an Ongoing Uptrend

How to identify a true bullish cycle? Several converging signals:

Technical signals: Bitcoin’s RSI rising above 70 (indicating strong momentum), price breaking above 50-day and 200-day moving averages. These crossovers often mark the start of sustainable trends.

On-chain data: Increasing wallet activity, stablecoin flows directed toward exchanges (preparing for massive buys), decreasing exchange reserves (signaling investors are withdrawing and hodling). In 2024, institutional holdings and ETF inflows are spectacular.

Macro factors: Regulatory approvals, favorable political shifts for crypto (like pro-crypto signals following the 2024 US elections), growing institutional adaptation.

Volume and sentiment: Explosive trading volume, buzz on social media, media coverage, FOMO among retail investors. Both the 2017 and 2024 cycles demonstrated this.

Challenges of the Current Cycle

Despite optimism, several risks threaten continued growth:

Extreme volatility: Bitcoin can correct 20-30% or more in days during profit-taking or external events. With leveraged positions, these corrections can amplify losses.

Massive speculative buying: ETF inflows also attract short-term traders. If FOMO turns into panic selling, the collapse can be brutal. The 2017 bubbles showed this.

Regulatory uncertainty: Increased US oversight, mining restrictions, or policy shifts in jurisdictions could slow momentum. China already banned mining; others may follow.

Macroeconomics: Recession, rising interest rates, or slowing inflation could reduce Bitcoin’s appeal as a hedge. Investors might shift to safer assets.

Altcoin competition: As Bitcoin’s market cap (currently $1,742 billion) grows, marginal returns diminish. Altcoins or new protocols could attract speculative attention.

Environmental impact: Criticisms of Bitcoin mining’s carbon footprint may dissuade ESG investors and lead to regulatory pressures.

Where Is Bitcoin Heading?

Several structural scenarios could strengthen future bullish cycles:

Bitcoin as a strategic reserve: The Bitcoin Act of 2024 (proposed by Senator Cynthia Lummis) envisions the US Treasury accumulating 1 million BTC over 5 years. If adopted, it would trigger unprecedented government demand. Countries like Bhutan (13,000+ BTC) and El Salvador (5,875 BTC) are already paving the way.

Technological innovations: The OP_CAT code, reintroduced on Bitcoin, could unlock capabilities like rollups and Layer-2 solutions, enabling thousands of transactions per second. Bitcoin would then become more than a store of value—a DeFi platform comparable to Ethereum.

Multiplication of institutional products: Beyond spot ETFs, derivatives, mutual funds, and more exotic vehicles will attract more institutional capital. Liquidity will improve, reducing structural volatility.

Clear regulation: Well-defined, favorable regulatory frameworks (like those emerging in the US) will encourage more cautious and sustainable adoption.

How to Prepare

For investors eyeing the next cycle:

Education: Understand Bitcoin fundamentals, its value proposition, and study past cycles. Patterns repeat but with variations.

Clear strategy: Define your goals (short-term gains vs long-term growth), risk tolerance, and investment horizon.

Secure platform: Choose a reputable exchange with 2FA authentication, cold storage, and regular security audits.

Secure wallet: For long-term holdings, use offline hardware wallets rather than online deposits.

Diversification: Don’t concentrate everything in Bitcoin. Balance with other assets and cryptos to mitigate volatility risk.

Emotional management: Avoid impulsive decisions. Use stop-loss orders to limit damage during corrections.

Tax considerations: Document each transaction for your jurisdiction’s tax obligations.

Conclusion: The Evolution of an Asset Class

Bitcoin is no longer the marginal technological experiment of its early days. It has become a multi-faceted asset: a store of value for retail volatility, an inflation hedge for institutions, potentially a strategic reserve for states.

Each bullish cycle has brought innovations and lessons. The 2013 cycle showed resilience despite shocks; 2017 democratized access; 2020-2021 institutionalized adoption; 2024 regularized exposure via ETFs.

The next speculative bubble will likely be fueled by a convergence of factors: halving (2028), potential government adoption, technological innovations, and deepening institutional liquidity. Signals to watch include regulatory developments, ETF flows, global macroeconomics, and government adoption.

Bitcoin will remain volatile—that is its nature. But its ability to rebound after each cycle, combined with the programmed scarcity of its 21 million coins, makes it a unique asset in the financial landscape. For well-prepared, informed, and disciplined investors, each cycle offers opportunities. Stay vigilant, diversify, and navigate cautiously.