From historical cycles to the 2024 new high: the evolution of the Bitcoin bull run

Since its inception in 2009, Bitcoin has experienced multiple cycles of upward trends and downward corrections, forming a unique pattern of market volatility. As the world’s largest digital asset, it exhibits vastly different growth drivers at various stages. Understanding the evolution of these cycles is crucial for grasping the next opportunity in the crypto market.

Current Market: Marking a New Era for Bitcoin

As of the latest data, Bitcoin’s price has surpassed $88.57K. Although it has pulled back from its all-time high of $126.08K, this reflects a market shift from speculative frenzy to rational institutional allocation. Since 2024, Bitcoin has gained 132%, rising from around $40,000 at the start of the year to a new high of over $93,000.

The key difference in this cycle compared to previous ones is the approval of spot Bitcoin ETFs, which has fundamentally changed capital inflows. In January 2024, the U.S. Securities and Exchange Commission approved the first batch of spot Bitcoin ETFs, opening a compliant channel for traditional institutional investors. Data shows that by November 2024, net ETF inflows exceeded $2.8 billion, far surpassing the same period’s gold ETF inflows.

Core Mechanisms Driving Bitcoin’s Upward Cycles

Supply-side Scarcity: The Four-Year Halving Events

Bitcoin’s fixed supply cap (21 million coins) ensures its long-term scarcity. The halving events, occurring every four years, cut the block reward by 50%, serving as the primary catalyst for bull runs:

• 2012 halving: price surged by 5,200%
• 2016 halving: price increased by 315%
• 2020 halving: price rose by 230%
• April 2024 halving: pushed the price from $40K to $93K+

Halving impacts prices through two channels: directly reducing new supply and creating psychological expectations that attract early investors. Institutions like MicroStrategy and BlackRock have increased their holdings based on this logic before and after halving events.

Institutional Entry: From Investment Asset to Strategic Reserve

Between 2020 and 2021, large-scale institutional inflows transformed Bitcoin’s narrative. From “geek experiment” to “inflation hedge” and “digital gold,” this shift shifted Bitcoin’s valuation logic from technology adoption to macro asset allocation.

Public companies like MicroStrategy added Bitcoin to their balance sheets, and BlackRock’s IBIT ETF holds over 467,000 BTC. These signals indicate that major capital now views Bitcoin as a strategic reserve asset.

Historical Review: From Niche to Mainstream

Early Exploration in 2013

Bitcoin’s first major attention grab came in 2013. It soared from around $145 at the start of the year to over $1,200 by year-end, a 730% increase. This rise was driven by two forces:

Technological optimism: Early adopters and the tech community’s enthusiasm, coupled with media coverage, created FOMO.

Real-world shocks: The Cyprus banking crisis (Spring 2013) made investors realize Bitcoin’s value as a trustless asset during financial instability.

However, this cycle also exposed infrastructure vulnerabilities. When a major exchange faced security issues and went bankrupt in early 2014, about 70% of market volume vanished, and prices plummeted over 75%. This taught the market the importance of security and regulatory frameworks.

Retail Boom and ICO Frenzy in 2017

2017 was the year retail investors woke up. Bitcoin skyrocketed from around $1,000 to nearly $20,000, a 1,900% increase. The rise was fueled by three overlapping factors:

ICO boom: Thousands of new projects raised funds via token issuance, exposing ordinary investors to “tokenomics.” Many bought Bitcoin as a foundational asset before investing in new tokens.

Exchange facilitation: Easier and more accessible trading platforms lowered barriers for retail investors to buy Bitcoin.

Media hype: Major price milestones ($10K, $15K, $20K) received extensive coverage, further fueling enthusiasm.

The cycle ended harshly. In early 2018, global regulators (notably China) cracked down on ICOs and exchanges, causing an 84% market correction from $20,000 to $3,200 within months. This reinforced the lesson that policy environment impacts crypto markets as much as technology.

Institutional Turning Point in 2020-2021

If 2017 was retail’s party, 2020-2021 marked institutional entry. Bitcoin rose from $8,000 in early 2020 to $64,000 in April 2021, a 700% increase.

This cycle’s uniqueness lies in:

Narrative upgrade: Massive liquidity injections during COVID-19 (central bank rate cuts, fiscal stimulus) supported Bitcoin’s role as an “inflation hedge” and “digital gold.”

Scaling institutional holdings: Public companies disclosed Bitcoin holdings; pension and sovereign funds began exploring crypto allocations; traditional asset managers launched Bitcoin funds.

Derivatives market maturity: Bitcoin futures and options markets enabled sophisticated position management for professional investors.

However, this cycle also faced ESG concerns. As Bitcoin’s price soared, criticism of mining energy consumption grew louder, influencing some ESG-focused institutional decisions. Mid-2021, a correction saw prices retreat by 53% from all-time highs.

Recognizing Key Signals of Bitcoin’s Upward Cycles

For investors, timely identification of a new bull run is vital. The following are key dimensions to observe:

On-Chain Indicators

Wallet activity: When large institutional wallets accumulate Bitcoin, on-chain data shows clear “whale accumulation” signals.

Exchange outflows: Increasing transfers from exchanges to cold wallets suggest long-term holding rather than short-term speculation.

Stablecoin inflows: Large inflows of stablecoins into exchanges indicate new capital preparing to enter. This was especially evident in 2024, with ETF approvals leading to massive institutional stablecoin inflows.

Technical Breakouts

Indicators like the Relative Strength Index (RSI) in overbought territory (>70), prices breaking above key 50-day and 200-day moving averages, and confirming breaks of historical resistance levels are classic bull run signals. In 2024, Bitcoin’s RSI reaching over 70 and remaining high for weeks supported the sustainability of this cycle.

Macro Resonance

Macro factors such as policy-driven environmental considerations (e.g., ETF approvals), geopolitical uncertainties (driving safe-haven flows), and rising inflation expectations (reinforcing “digital gold” narrative) often start brewing before a bull run begins.

The Unique Nature of the 2024-2025 Cycle: From Speculation to Allocation

This cycle features three prominent characteristics that may reshape Bitcoin’s long-term trajectory:

Institutional ETF Approval as a Systemic Breakthrough

The approval of spot Bitcoin ETFs in January 2024 acts as a systemic bridge between traditional capital markets and crypto markets. Unlike 2020’s futures ETF, the spot ETF allows direct Bitcoin exposure without counterparty risk.

The ongoing impact is evident: more pension funds, insurance companies, and international asset managers are evaluating Bitcoin allocations. Historically, gold took decades to reach current ETF scale; Bitcoin could reach similar levels within a few years.

Prospects of National Strategic Reserves

In 2024, the U.S. Congress proposed the Bitcoin Act (a plan for the U.S. Treasury to acquire up to 1 million BTC over five years). Although not legislated yet, it signals serious consideration of Bitcoin as a strategic reserve.

Earlier, Bhutan’s sovereign fund accumulated over 13,000 BTC, and El Salvador adopted Bitcoin as legal tender. These pioneers serve as models for other nations. If major economies begin holding Bitcoin as part of foreign reserves, it could fundamentally shift demand dynamics.

The Launch of Technical Upgrade Cycles

Bitcoin’s network is exploring scalability solutions, including enabling specific opcode operations (like OP_CAT), which could open the door to Layer-2 applications. Once Bitcoin supports efficient rollup tech and DeFi, its use cases will expand significantly, attracting developers and capital that currently flow to other chains.

Practical Guidelines to Manage Risks and Seize Opportunities

Deepen Understanding of Bitcoin Fundamentals

Investors should grasp Bitcoin’s core features: fixed supply, periodic halving, proof-of-work consensus, and trustless operation. These characteristics underpin Bitcoin’s long-term scarcity and censorship resistance, forming the basis of its “digital gold” status.

Studying historical cycles helps not only in predicting future trends but also in understanding market psychology. Each bull run is driven by different narratives; recognizing whether the current dominant narrative still holds is key to avoiding traps.

Develop Personalized Investment Strategies

Factors like capital size, risk tolerance, and investment horizon should directly influence your approach to Bitcoin. Holding spot, using ETFs, full position or diversified, dollar-cost averaging or timing—there’s no one-size-fits-all answer, but clarity about your own profile is essential.

For conservative investors, spot Bitcoin ETFs offer lower operational risk; long-term holders may prefer cold wallets to avoid exchange risks.

Choose Reliable Trading Infrastructure

Regardless of your trading method, security is paramount. Ensure your platform has proper licensing, robust custody mechanisms (preferably cold storage), and regular security audits. In 2024, participation through licensed institutions (like ETFs) greatly reduces risks.

Proactively Avoid Psychological Traps

FOMO (Fear of Missing Out) is a common psychological pitfall in crypto investing. When Bitcoin’s weekly gains reach double digits, retail investors’ impulsive entries often mark cycle tops. Conversely, during downturns and pessimism, institutional players quietly position for the next cycle.

Using stop-loss orders and risk management tools is not about perfect timing but about preventing a single mistake from destroying your entire plan.

Pay Attention to Tax and Regulatory Changes

Different jurisdictions have vastly different tax treatments for Bitcoin trading and holdings. Tax payments, asset declarations, and transaction recordkeeping—if mishandled, these can lead to serious legal consequences.

Stay alert to regulatory developments in your region. Historically, sudden policy shifts have triggered market corrections.

Key Indicators for the Next Bull Run

Upcoming Technological Upgrades

Advancements in Bitcoin’s code and scalability solutions may generate new momentum within 12-24 months. If Layer-2 solutions mature, Bitcoin could evolve from a “store of value” to a “multi-functional asset infrastructure.”

Policy Shifts in Major Economies

Changes in central bank liquidity policies, inflation expectations, and geopolitical tensions often determine asset allocation directions. Bitcoin, as a risk asset, increasingly correlates with macro variables.

Rising Institutional Holdings

If giants like BlackRock and Vanguard continue increasing their Bitcoin allocations, it will not only push prices higher but also reinforce Bitcoin’s role in mainstream finance. Once Bitcoin becomes a “core asset class,” its volatility may decrease, and risk attributes will diminish.

Conclusion: From Cycles to Certainty

Bitcoin’s history shows each bull run involves a journey from hype to skepticism to acceptance. The 2024-2025 cycle, driven by the emergence of spot ETFs, marks a milestone—transitioning Bitcoin from an “alternative asset” to a “mainstream financial product.”

Investors don’t need to predict the exact timing of the next peak but must understand the current cycle’s drivers, risks, and evolution. Through systematic learning, rational strategies, and strict risk management, one can capture the long-term upward trend even amid high volatility.

Recent performance—rising from $40K to over $88K—has already validated the strength of this cycle. Whether you choose to participate or observe, understanding market cycles is fundamental. The next key point lies behind every on-chain data point, policy signal, and institutional decision. Stay alert and be prepared.