“Everything feels unprecedented when you haven’t engaged with history.”
So, before we discuss what likely makes the crypto bull market really return, and especially if you’re new to crypto or feeling anxious about the markets, I think it’s crucial you first read & understand a short story I’d like to share with you.
This story is about the surprisingly predictable patterns of Bitcoin’s price, which at the time of writing, is hovering around $20,000, a price level is a really big deal psychologically to Bitcoin traders — Because, you see, in late 2017, BTC nearly crossed $20k for the first time, stopping just short before painfully crashing back down and spending three long years struggling to get back to $20k again
What’s so interesting is the same thing also happened following 2013. BTC crossed $1k for the first time, but not long after its price disastrously declined with the news of a massive hack at Mt.Gox in early 2014, which at the time was the world’s largest crypto exchange, processing 70-80% of all Bitcoin trading volume. In comparison, Binance, which is currently the world’s largest exchange, handles only about 7% of all Bitcoin trading volume.
So, if we look at both of these examples of Bitcoin’s rips and dips over the years for patterns, we can start to see that there’s an undeniable recurring 4 year cycle with Bitcoin’s price behavior, and it begins with the year Bitcoin sets a new ATH — 2013, 2017, and 2021. Following that euphoric rise, Bitcoin, along with the crypto markets, then completely crashes sometime in the following year: 2014, 2018, and now 2022.
Something to note about those crashes is that going from crypto peak to floor has historically taken ~12 months. I expect that pattern to play out again this year into 2023, especially considering Bitcoin’s most recent peak was set Nov 2021.
That’s why it’s important you understand what happens during the 3rd year of the cycle; the one that comes after the year Bitcoin crashes: 2015, 2019, and now likely 2023, because that’s when the market is sideways, that’s when crypto seems boring or “dead”, that’s when all the hype-driven tourists have left, and above all, that’s when the real crypto investors are busy building wealth and that’s when the real crypto developers are busy building the next big thing, without the distractions or all of the noise that comes with a bull market.
The sideways year represents the shift from a pessimistic bear market to a quietly focused build market, and is what sets the stage for the final year of Bitcoin’s 4 year price cycle: the year of Bitcoin’s halving event, which coincidentally happens every 4 years: 2016, 2020, and 2024.
Because the timing of is very predictable and thus will be priced in, the halving event does not likely kick off a bull market by itself, at least for a few months pre and post halving, but historically it has been the case that the reduced supply schedule affects Bitcoin prices positively the following year after the miner shakeup self-corrects.
Thus, simply going off Bitcoin’s predictable 4 year price cycle of Crash -> Sideways -> Halving -> ATH, we can expect a new Bitcoin ATH in 2025, just like we saw in 2017 and 2021.
Here’s what that looks like:
2013 – Bitcoin’s all time high
2014 – crash
2015 – sideways
2016 – halving event
2017 – Bitcoin’s all time high
2018 – crash
2019 – sideways
2020 – halving event
2021 – Bitcoin’s all time high
2022 – crash
2023 – sideways
2024 – halving event
2025 – Bitcoin’s all time high
No matter what, Bitcoin’s recurring 4 year market cycle will play an important role in making the crypto bull market return and see us chasing all time highs again. Tomorrow I’m going to discuss more of the catalysts for a reversal on the macro side.