Bitcoin's ascent cycles: from early surges to the institutional era of the cryptocurrency market

Bitcoin is experiencing another period of dynamic growth. As of the end of 2024, the price of the digital asset has reached historic highs, surpassing $88,000, reflecting the long-term trend of transforming the cryptocurrency market from a niche segment into a full-fledged financial instrument. Understanding the mechanisms driving the ascent cycles becomes critically important for investors seeking to navigate the volatile world of digital assets.

Anatomy of an Uptrend: What Moves Bitcoin’s Price

The upward cycle of Bitcoin is not a spontaneous phenomenon. Every significant rally in the history of the asset has been triggered by a combination of technical, regulatory, and macroeconomic factors that create conditions for a mass influx of capital.

Technical signals of ascent include breaking through key resistance levels, an RSI (Relative Strength Index) above 70, and the crossing of the price with the 50- and 200-day moving averages in an upward direction. These indicators signal a shift in momentum—from accumulation to active bullish movement.

At the network level, signs of impending growth include increased address activity, inflows of stablecoins to exchanges (indicating readiness to buy), and a decrease in Bitcoin reserves on trading platforms. When professional investors start moving assets into cold storage, it often precedes a phase of price appreciation.

Macroeconomic context is inextricably linked to Bitcoin’s pricing. Periods of liquidity crises, inflationary pressures, and declining trust in traditional financial systems have historically coincided with phases of active growth in digital assets.

2013: First Market Test. Surge from (to $1,200

The history of Bitcoin’s upward cycles begins in 2013—a period when few believed in the market’s potential. Over nine months, from May to December, the price rose from around )to nearly $1,200—an increase of 730%, astonishing even by crypto market standards.

This rally was driven by several factors. First, the banking crisis in Cyprus in March 2013 demonstrated the fragility of the traditional banking system, prompting some investors to seek alternative assets. Second, widespread media coverage created a feedback loop: rising prices attracted media attention, which in turn fueled further demand.

However, this euphoria was short-lived. In 2014, an event shook the market: the Mt. Gox hack, then the largest exchange, which handled about 70% of all Bitcoin transactions at the time. The loss of hundreds of thousands of Bitcoins from user accounts led to a collapse in confidence. The price fell below $145 —a decline of over 75% from the peak.

2017: Retail Boom and the ICO Phenomenon

Four years later, Bitcoin climbed even higher. If 2013 was the first test, 2017 became a triumphant march through mass media as the year’s financial event.

From $1,000 in January to nearly $20,000 in December—an increase of 1,900%. During this period, daily trading volume expanded from less than $145 million to over $300 billion. It was an era of explosive growth in retail interest, fueled by the ICO (Initial Coin Offering) ecosystem, with new projects raising funds in Bitcoin and Ether every day.

Easier access to trading platforms allowed ordinary people without specialized knowledge to participate. Social media was flooded with stories of people getting rich from cryptocurrencies. The FOMO (fear of missing out) effect attracted waves of new participants.

But all that was built in a year was destroyed in three months. By December 2018, Bitcoin had fallen to $3,200—a catastrophe of 84% from the peak. Regulators worldwide, including China, which effectively banned ICOs and crypto exchanges, dealt a blow to speculative euphoria. The immature market took years to regain trust.

2020-2021: Institutions Enter the Game

The third ascent cycle was marked by a qualitative shift. If 2017 was a retail speculative circus, 2020-2021 signaled the entry of institutional money.

Starting at $8,000 in early 2020, Bitcoin rose above $64,000 by April 2021 $200 700% growth$15 , eventually reaching a maximum of around $69,000. The drivers of this rally were not retail traders but large corporations and funds.

MicroStrategy, a software development company, began aggressively accumulating Bitcoin, eventually holding over 125,000 BTC. Tesla, supported by Elon Musk, announced a $1.5 billion investment in the digital asset. Square followed suit. These moves signaled a shift in perception: Bitcoin was no longer just a hacker’s toy but was starting to be viewed as a legitimate asset for portfolio diversification.

Simultaneously, new financial instruments developed. Approval of Bitcoin futures at the end of 2020 and ETFs in various jurisdictions opened the door for conservative investors who previously could not or did not want to hold cryptocurrencies directly.

The narrative transformed: Bitcoin was positioned as “digital gold” and a hedge against inflation amid the distribution of government stimulus and record monetary emissions caused by COVID-19.

2024: Spot ETF Approval and the Fourth Halving

The current ascent cycle, beginning in 2024, has combined several powerful catalysts simultaneously.

Approval of spot Bitcoin ETFs. On January 11, 2024, the SEC (U.S. Securities and Exchange Commission) approved the first spot Bitcoin ETFs. This was a turning point: now traditional investors could gain exposure to Bitcoin through familiar instruments—via their brokerage accounts, just like stocks.

By the end of the first month, inflows into these ETFs exceeded (billion. By November 2024, total capital inflow reached )billion, surpassing gold ETFs in the global market. This was an unprecedented volume.

The fourth halving. In April 2024, the fourth Bitcoin halving occurred—an automatic reduction of the block reward by half. This technical event, embedded in the network code, happens approximately every four years and has a magical effect on the price.

Historically, each halving has triggered explosive growth in the following months:

• After the 2012 halving: +5,200%
• After the 2016 halving: +315%
• After the 2020 halving: +230%

The mechanism is simple: reducing supply while demand grows leads to higher prices.

Political context. Donald Trump’s re-election in November 2024 boosted optimism in the crypto community. The candidate positioned himself as a supporter of digital assets, contrasting with the critical stance of the Biden administration. Promises of potential recognition of Bitcoin as a strategic reserve further fueled speculative interest.

Result. By November 2024, Bitcoin soared from around $40,000 at the start of the year to $93,000—an increase of 132%. As of December 2024, the price stabilized around $88,560, reflecting some correction after the massive rally.

Recognizing the Pattern? The Architecture of Upward Cycles

Analysis of the four main ascent cycles (2013, 2017, 2020-21, 2024) reveals a recurring structure:

1. Trigger. Each cycle is preceded by an objective event: trust crisis (2013), technological boom $10 2017$28 , macroeconomic shock (2020), regulatory approval (2024).

2. Activity growth. Trading volume increases, social media activity skyrockets, and the number of active addresses in the network sharply rises.

3. Euphoria and overvaluation. Media pick up the theme, forming a narrative of a “new paradigm.” Retail investors enter the market with maximum force.

4. Correction. The peak is always followed by a deep correction—from 50% to 84%. This phase causes paralysis among participants and closes the doors to newcomers.

5. Consolidation. Years of pain prepare the ground for the next ascent.

What is Needed for the Next Surge?

Looking ahead, the driving forces of future ascent cycles are likely to include:

Expansion of the institutional base. The emergence of new regulated products—not only spot ETFs but also futures instruments, mutual funds, syndicated loans—will attract conservative institutions that have so far stayed on the sidelines.

Recognition of Bitcoin as a strategic reserve. The proposed “Bitcoin Act of 2024” by the US Congress aims to purchase up to 1 million BTC by the Treasury over five years. If implemented, this policy would fundamentally change market dynamics. Small countries like Bhutan (more than 13,000 BTC) and El Salvador (around 5,875 BTC) have already included Bitcoin in their national reserves.

Network technological improvements. Discussions are underway to implement the OP_CAT function in the Bitcoin protocol, which could theoretically enable second-layer solutions and DeFi applications. This would expand Bitcoin’s functionality beyond a simple store of value.

Cyclical events. The next halving is expected around 2028. History shows that the 12-18 months before halving are usually characterized by active growth.

How to Navigate Volatility: Practical Recommendations

Each ascent cycle offers both opportunities and pitfalls. For investors looking to capitalize on the next growth phase, the following principles are useful:

Education before investing. Before allocating funds, study Bitcoin’s architecture, price factors, and historical volatility. Do not trade money you cannot afford to lose.

Diversification. Although Bitcoin accounts for about 45-50% of the total crypto market capitalization, it remains a volatile asset. Consider a balanced portfolio including traditional assets (stocks, bonds), and alternative cryptocurrencies.

Choose a reliable platform. Use reputable trading platforms with robust security systems, two-factor authentication, and cold storage for user funds. Avoid new and unknown services.

Long-term storage. If you believe in multi-year appreciation of Bitcoin, store assets in hardware wallets (such as Ledger or Trezor), which are protected from online hacks. Avoid keeping large sums on exchanges.

Monitor technical signals. Track key indicators: RSI, moving averages, trading volumes, network activity. But remember, technical analysis is a probability tool, not a law.

Adhere to percentage limits. Avoid margin trading and borrowing that could lead to liquidation during sharp corrections.

Tax planning. Keep accurate records of all transactions. Realized profits from cryptocurrency trading are often taxed as short-term capital gains. Tax optimization strategies (for example, tax-loss harvesting) are also possible.

Conclusion: Uncertainty in Details, Trend Overall

The exact timing of the next Bitcoin ascent cycle remains unpredictable. Markets are not driven by calendar dates but respond to a combination of information, sentiment, and external events.

However, the history of the four main ascent cycles (2013, 2017, 2020-21, 2024) shows that the mechanism underlying Bitcoin’s volatility is periodic. Halvings, regulatory milestones, macroeconomic shifts, and market participant evolution all create conditions for new rallies.

The current cycle, launched in 2024 with spot ETF approvals and the fourth halving, has brought the price close to $93,000. The correction at the end of the year to $88,560 is natural and healthy—it filters out speculators and prepares the ground for the next phase.

For investors entering this space, the key advice is: do not chase the peaks. Prepare for long horizons, diversify, educate yourself, and practice risk management. History does not repeat itself but rhymes—and knowing this rhyme can significantly improve results in the volatile crypto bull runs.