At the end of the previous year, Bitcoin started to experience slight growth. Many predicted that we would be approaching a new bull market, considering, at that moment, the upcoming Bitcoin ETF and the four-cycle halving that happened at the end of April 2024. It was historically the initial capsule for the beginning of a new growth in the value of the entire crypto market. In fact, it represents the beginning of something called the Bitcoin cycle theory.
In early January, the SEC approved Bitcoin trading on stock exchanges. This was considered to be the biggest historical step of cryptocurrency in the acceptance of this type of digital asset by institutions. After only two months, it can be seen that this theory was correct. Bitcoin is 11.03.2024. hit a new all-time high, reaching the price of $72,850. That was something many expected to happen only after the Halving, and no doubt, many wondered what was happening with the crypto market. Can we forget about the old look of the “Bull” pattern, and what can we expect in the future?
Bitcoin Volatility
Although newcomers to the crypto market wonder why they see the rise in the price of BTC as a reason for fear, the problem is not that its value has reached a maximum. That was roughly 45 days before the Halving, which had never happened before. Many are worried that this Bull will last much shorter and that they will miss their chance to make a profit. In addition, investors focused on smaller tokens are afraid because only certain “alt” coins follow BTC by jumping on par with previous cycles.
However, this can be justified because alt tokens experience their real pump only after Bitcoin reaches its maximum and its profit flows into other tokens. In the rest of the text, we will present several theories that justify the current events and growth of BTC.
History of the Crypto Cycle Theory
Before we present theories about what is currently happening in the crypto market, it is necessary to explain how crypto cycles work. That is, how it looked in previous years. When we take a look, we will see that an almost identical pattern was roughly repeated with minimal differences, so let’s go:
Origin of BTC – The First Halving
Bitcoin was created in 2009, with the first block mined by Satoshi Nakamoto on January 3, 2009. The birth of Bitcoin set the stage for various stock market bull and bear markets in the crypto industry. BTC first achieved fungible value with the creation of Mt. Gox in 2010. The first BTC Halving happened on November 28, 2012. when the mining reward dropped from 50 BTC per block to 25 BTC. After that, Bitcoin began to record even greater growth and, from a value of around 20 USD, reached a maximum price of 1,238 USD exactly on the day of the Halving one year later. Bitcoin recorded a growth of over 8000% from the moment of the Halving until reaching a new ATH, after which it began to lose value, and BTC experienced its first major “Bear” market.
Second Halving
The price of the most famous cryptocurrency in the world has constantly fallen within the next two years. Bitcoin fell from the already mentioned USD 1,000 to below one hundred dollars. That caused many people to doubt and regret that they did not sell their BTC when it was at a four-digit sum. Nevertheless, “digital gold” showed great resistance, and the next Halving occurred on 07/09/2016. when the mining reward is halved again. The price of Bitcoin at the time of Halving was 664 USD, but this time, it would take a little more time to reach the new ATH. BTC reached its new maximum value in December 2017, reaching 19,400 USD.
Third Halving
In the second Bear cycle, Bitcoin’s value dropped from almost USD 20,000 to slightly more than USD 3,000. However, as the Halving approached, the pattern repeated itself, and BTC began to rise again like a phoenix from the ashes. The price at the moment of the third halving in May 2020 was USD 9,730, and at its peak in November 2021, BTC’s value would have reached almost USD 69,000.
To all this, it should be added that Bitcoin had many aggravating circumstances in its past, such as the COVID-19 virus and the war between Russia and Ukraine. If this had not happened, who knows what the pattern of this cryptocurrency would look like today? It is clear that in the period before the halving, Bitcoin began its “warming up” and slow growth. But never in history has it reached its maximum price far before the halving. This cryptocurrency’s price fell to USD 16,500 in December 2022.
Cycle Theory
Two theories are related to the “premature” jump of the Bitcoin. We will try to briefly explain the opinions of experts on what is currently happening in the crypto market:
The Big Investors Theory
There is no doubt that the approval of the Spot ETF by the SEC represents the biggest step forward for cryptocurrencies. Consequently, it is logical that this event encouraged Bitcoin to further strengthen its growth in the “pre-halving” phase. Quite simply, we have come to a situation where serious players have entered the game. We primarily refer to Blackrock, Bitvise, Van Eck, Fidelity, and many others. In exactly two months, Blackrock owns more than 200,000 pieces of BTC, which is, let’s agree, a substantial figure.
Bitcoin has always been attractive to people from “Wall Street.” The fact that people who invest in the stock market and actions no longer have to open wallets, study crypto, or think about where and how to store it has opened the door for them to simply call their broker and place an order to buy Bitcoin on their behalf. There is no doubt that this is a moment that none of them wants to miss. Everyone wants to position themselves in the best possible way before the start of the Bull, which can change the lives of many.
All this tells us that we are still in the pre-halving growth phase. It is stronger than ever this time, given that it has the support of an ETF. This theory also tells us that the biggest bull run in history is ahead of us. In fact, it may be the last one of this type. It is logical that in the next four years, large institutions will put their paws on a huge part of the crypto market and thus take over the dominance.
Theory of the “shifted” cycle
Some theorists believe that the ETF was the initial capsule for starting the Bull cycle. In other words, it replaced Halving, which occurred at the end of April this year. That is, we can consider January 10 as the day of the start of the Bull market. This would practically mean that the entire cycle has shifted to the left since it started earlier. It would also mean that it will most likely end earlier. Finally, BTC reaches its new ATH approximately 270 to 300 days after reaching the value of the previous one (not from the moment of Halving). We think that this cycle theory is a serious gamble.
However, this theory has many opponents. Many believe that the true revelation of Bitcoin will happen with its additional scarcity – halving. Then, the mining reward will be reduced from 6.25 BTC per block to 3,125. Also, many theoreticians refuse to be tied to a specific time period. Instead, they put the BTC price as a basis. The same, by many estimates, should be over $100,000. Somewhat more optimistic experts say that we should not be surprised if, at this rate, the value of one BTC at the peak of the Bull will be from 190,000 to 250,000 USD!
Conclusion
The entry of large institutions into crypto indicates that Bitcoin is a good protection against inflation, which is one of the basic problems of fiat money. In addition to the already mentioned investment banks, certain companies such as Microstrategy and Tesla have been investing in Bitcoin for a long time. However, not only companies but also some countries, such as El Salvador, have been investing in Bitcoin.
In addition, both theories lead us to the same conclusion. The new Bull Run, which will be the biggest in history, lies ahead of us. The upcoming events (Halving and Ethereum ETF) can only further arouse the attention of new investors to invest in crypto. Undoubtedly, all this will lead to an increase in the value of both Bitcoin and other currencies. However, although this conclusion radiates optimism, there will be great challenges on the way to the new All-time High.
The most important thing is that you follow the growth and outline your goals. With that, make a plan and get ready for what’s to come. At one point, withdraw at least part of the profit. The crypto market is very volatile. Even the smallest globally induced turbulence can lead to tectonic disturbances in the crypto market.
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FAQ
Is Bitcoin a good investment?
Bitcoin is a cryptocurrency designed to be used as a payment method. Investors and traders have also started using it as an investment, but the price is very volatile, which creates significant financial risk. However, if you want to invest money in crypto, Bitcoin is by far the safest option.
What is Bitcoin halving?
Halving is an event in the crypto world when the reward for mining new Bitcoin blocks is halved. This means the number of new bitcoins awarded to miners for each successfully mined block is halved. This process happens approximately every four years and significantly impacts the supply and demand of Bitcoin, which can affect the price of this cryptocurrency.
What is the SEC?
The SEC is a federal agency in the US that regulates and supervises capital markets and securities exchanges. Its main goals are to protect investors, preserve market integrity, and promote transparency in securities trading. The SEC enforces various regulations and rules to ensure that publicly traded companies provide accurate and complete information to investors and that the market operates in a fair and efficient manner.
Can BTC reach $100,000 this year?
Although this prediction is ungrateful because Bitcoin has shown in its history that it depends a lot on the external world and political events, we can say that we are in the growth phase of the crypto market, where everything is possible. In fact, we believe that this cryptocurrency will have a six-digit value by the end of 2024.
What is the easiest way to buy Bitcoin and other cryptocurrencies?
The easiest way to buy cryptocurrencies is by using centralized exchanges such as Binance, Kraken, or Coinbase. These platforms are reliable and allow users to easily buy popular cryptocurrencies like Bitcoin, Ethereum, and others.
