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What should we learn from Bitcoin’s previous bull cycles?

Bitcoin, the precursor of cryptocurrency, demonstrated that the traditional investment tools as we know them aren’t everything the financial landscape can offer. The cryptocurrency that went from valuing close to zero when it emerged in 2009 to a whopping $69K per coin less than three years ago wholly revolutionized the financial realm of our days.

In March of this year, the leading crypto once again breached the $69K threshold, marking a moment that the whole crypto community has been waiting for before being ensured that Bitcoin can have more impressive performances than before. Now, crypto experts and bitcoin billionaires such as the CEO of MicroStrategy, Michael Saylor, dare to exclaim that bitcoin could soon be threatening the leading position of gold and the S&P 500 if it keeps climbing the ladder at such a fast pace.

Evidently, Bitcoin is anything but new to the hype and fuss we’re witnessing today, having already spurred interest and fueled some of the wildest aspirations in investors just to leave them heartbroken with its downfalls. The new, approaching bull cycle whose dawn we’re witnessing today calls for more precaution and common sense when exploring the spontaneous and volatile Bitcoin market, which is why we’re turning to some of the most valuable lessons that past bull runs and cycles have offered us to date.

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The first cryptocurrency debuted in 2008

For those who only keep posted on the news, it’s helpful to spend a few mins to recall the moment Bitcoin broke into the market in 2008. Tracing it down to its emergence will give us a glimpse of the tremendous potential that such a groundbreaking project could have, so it’s easier to grasp where all the hype came from.

Satoshi Nakamoto, the said Bitcoin developer whose identity has never been revealed, gained inspiration from previous cryptocurrency projects that existed before Bitcoin but were stopped in their tracks. The 3rd of January marks the day that the first block ever got mined, as well as the starting point of all the craze that followed.

Bitcoin’s arrival additionally translated into the inception of other, various bear and bull cycles in the cryptocurrency market. It went on to gain substantiality and see its market cap grow from nothing during the following year, more specifically simultaneously with the development of Mt. Gox in 2010. From this year on, Bitcoin lived to grow from almost nothing to around $150 per coin, proving to us that some happy-ending plots turn into reality as far-fetched as they may initially seem.

The first time the bull entered the arena, 2011

The first bull market evidently had all the tech pundits’ heads turning, for most of them had yet to witness the dawn of such a revolutionary boom. Bitcoin is among the few investment assets that gained so much traction in such a short time and generated fortunes for early adopters who were attracted instead of afraid of the asset’s novelty, clumsiness, and volatility.

Bitcoin started climbing in 2011 from a modest $1 to a peak of $29.6 in the first part of June. Nevertheless, the jump was followed by a drop after a sharp crypto market recession, pushing Bitcoin down to a depressing $4.7 by the end of the year.  

The waters were calm for the poster crypto in 2012, registering slight rises of several dollars. It was 2013, however, that brought good fortune for the reigning digital coin, seeing it trade from an incipient $13.3 to over $200 by the 3rd quarter of the year, and the boom didn’t stop there. By the end of November, the initially irrelevant crypto asset had risen by almost 1000%, capping the year at an unexpected $805.9.

That is where the Bitcoin craze began, heralding the hysteria that followed, spanning the years up to the moment of writing and likely well beyond these days. The best investment strategies and trading techniques were starting to shape up, and people started to realize that long-term perspectives could be the winning ones for those without a knack for day trading.

The period marked by upward price trajectories spanning November 2011 to April 2013 isn’t explicitly regarded as the primary bull run in the crypto space. Nevertheless, that timeframe can be talked about as the first bull raid fueled by substantial geopolitical factors. Bitcoin’s increasing acceptance as an alternative to conventional investment tools for safeguarding wealth and shielding it from inflation and other economic influences started to become a prevalent phenomenon.

A turbulent period spanning 2015-2017

After a depressing bear run in part triggered by the Silk Road’s closedown, the downward trajectories started to uplift in 2015. The leading crypto traded at $200 to $300 for the better part of the year, seeing its price grow starting with the Q3 and encouraging more and more wannabe crypto investors to take the leap of faith. By 2017, BTC had already broken the $650 threshold.

Due to developing crypto hype and rising media coverage for the main and largest cryptocurrency, as well as other imitations that followed in its footsteps, investors witnessed the dawn of a new bull run during 2015 and 2017. Those who stuck to their BTC holdings had only reasons to rejoice, as their previous undertaking generated substantial profits. Thus, Bitcoin’s history was marked by a notable milestone by that time.

Bitcoin started reaping what it saw, like investors

Bitcoin’s price hurtled toward the $1K threshold until it breached the $2K one in the second quarter of 2017, witnessing capital influxes that catapulted it to a generous $19,345.49 by the end of December.

This is when economists, governments, scientists, and mainstream investors started taking notice of the new financial trend and the underlying tech infrastructure and started building digital currencies that would enjoy similar fame.

Bitcoin moved sideways during the following years, following a downward trend. The asset finally approached the $3K mark in December 2020, when it traded at a little under $29K.

Bitcoin ended less than a month to break that record high, exceeding $40K in the first week of 2021. September harbingered a new bull raid, seeing values scraping $52K before a drawdown pushed the asset down to $40K. However, one of the best periods to date was shaping up for Bitcoin, which reached its first ATH in November 2021, getting as close as $68,789 before capping December at a little over $64K.

What about now?

Now, 2024 registered the second time Bitcoin rose that high, recording a surge over the $69K level in the third month of the year. Those late to the game should know that Bitcoin is approaching a new milestone, whereas all the media coverage gained during the last weeks.

One can learn that nothing is visible in the larger crypto space, whether you look at the prominent Bitcoin or the few-weeks-old crypto looking like a gainer. Always use common sense and do your research from reliable sources, avoiding falling victim to FOMO and other misleading trends.

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