Bitcoin’s cyclical cycle: the bull market driven by the halving engine and the never-ending plunge

Nakamoto 2025-11-17 13:18 16700人围观 BTC

Since its quiet emergence in 2009, Bitcoin has shown the world what a financial wonder is in the digital age with its thrilling price trajectory. It is like a ship without a helmsman, riding the wind and waves in the vast ocean of capital. Every carnival that soars into the sky and every panic that falls into the abyss together outlines its unique cyclical pulse. Among them, a core mechanism - the "halving" event that occurs approximately every four years, has formed an intriguing echo with the rounds of soaring bull markets. However, at the same time, countless cliff-like plunges of more than 50% always remind the world that this is both a fertile ground for opportunities and a minefield of risks.

The Halving Narrative: The Bull Market Engine Driven by Supply Contraction

Bitcoin halving is the core economic model written in the code by its founder Satoshi Nakamoto. It artificially creates scarcity and simulates the mining process of precious metals by programmatically reducing the new currency rewards miners receive from mining. This design has been verified by the market three times in history as the fuse that ignited the bull market.

In November 2012, Bitcoin completed its first halving, with the block reward reduced from 50 BTC to 25 BTC. In the days that followed, this “golden seed” in the digital world began to sprout. The price started from around 10 US dollars and soared to 1,000 US dollars in 2013, creating a wealth myth of nearly a hundred times.

In July 2016, the second halving came as scheduled, and the reward was reduced to 12.5 BTC. After a period of brewing, the market broke out into an epic bull market in 2017. Bitcoin started from about US$400, and was enthusiastically pursued by global investors. It eventually reached its historical peak of nearly US$20,000, and its "digital gold" narrative began to take root in the hearts of the people.

In May 2020, the third halving was held under the shadow of the COVID-19 epidemic, and the reward was further reduced to 6.25 BTC. Despite the huge uncertainty facing the global economy, Bitcoin has shown amazing resilience. Starting from about $9,000 at the time of the halving, it has been on a roll in 2021, eventually breaking through the $69,000 mark, pushing the total market value of cryptocurrencies to a new height.

These three clearly identifiable "halving-bull market" cycles have created a strong expectation of supply contraction in the market. Whenever a halving occurs, the rate of new currency output slows down. Assuming that demand remains unchanged or grows, the balance of supply and demand tends to tilt towards the side of rising prices. This deterministic scarcity based on mathematics is the unique charm of Bitcoin that distinguishes it from any traditional assets.

On April 20, 2024, Bitcoin completed its fourth halving, and the block reward dropped from 6.25 to 3.125. The price that day was fixed at $63,914. The eyes of the whole market are once again focused, waiting with bated breath, trying to explore whether the laws of history will be perfectly performed for the fourth time.

The other side of cruelty: the never-ending plunge warning

However, the growth history of Bitcoin is by no means all about triumphant songs. The other side of it is a cruel and dangerous textbook full of "cutting in the waist" and "cutting off the ankles". The fragility of its price has been exposed in at least six major plunges.

Early Pains (June 2011): Bitcoin free-falled from a high of $32 to $0.01, a 99% drop. The main reason for this collapse was the hacker attack on Mt. Gox, the largest exchange at the time, which exposed the extreme immaturity of the infant cryptocurrency market in terms of security and liquidity.

Successive blows (2013-2014): After hitting $1,000 for the first time, the market was hit with a risk warning issued by the People’s Bank of China, and the price immediately plummeted 85% from $1,166 to $170. Misfortunes never come singly. In early 2014, another crisis broke out at Mt. Gox. 850,000 Bitcoins were stolen and it eventually declared bankruptcy, causing market confidence to collapse and prices to fall another 58%.

Bubble Burst (2018 Bear Market): After the $20,000 mania, there was a year-long winter. As the ICO (initial coin offering) bubble burst and global regulations continued to tighten, the price of Bitcoin plummeted to $3,122, a drop of 84%, and countless speculators lost their money.

Global Panic (March 2020): The COVID-19 epidemic swept the world, triggering panic selling of all risk assets. Bitcoin fell from US$9,000 to US$3,850 within 24 hours on "Black Thursday," a drop of more than 50%. Its "safe haven asset" attribute was seriously questioned at the time.

Policy and Macro Impact (2021): Just as Bitcoin was rushing towards new all-time highs in 2021, China’s policy of completely banning cryptocurrency mining caused it to fall from a high of $64,000 to $30,000. In the same year, the Federal Reserve issued a signal to raise interest rates, causing it to fall from US$40,000 to US$29,000.

Implosion and Crunch (2022): The collapse of the algorithmic stablecoin Terra (LUNA) project triggered a chain reaction in the industry, like a "Lehman moment" in the digital field. Coupled with the aggressive interest rate hike cycle initiated by the Federal Reserve to combat inflation, Bitcoin has fallen from a high of $48,000, and finally fell to $16,300 at the end of 2022, a drop of 66%.

Latest volatility (February 2025): The latest violent volatility shows that even as the market matures, risks still follow. Dragged down by geopolitical tensions and the plunge in technology stocks, Bitcoin fell 6.83% to $91,130 in a single day, while mainstream cryptocurrencies such as Ethereum fell by more than 20%.

Summary of rules: stay rational in the cycle of reincarnation

Looking at the fifteen years of Bitcoin, a clear outline emerges: the halving event is the catalyst that spawned the bull market, but every bull market craziness is inevitably followed by a tragic clearing, with the correction often exceeding 80%. Bear market cycles usually last 1 to 2 years, during which the market completes bubble extrusion, chip changes, and the rebuilding of confidence.

There are various factors that trigger these plummets, including but not limited to: sudden policy regulations (such as bans from central banks), fatal security incidents (such as exchange hacking attacks), global macroeconomic crises (such as financial crises, epidemics, interest rate hike cycles), and specific risks within the industry (such as project failure, algorithmic stablecoin de-anchoring).

Bitcoin’s history provides a valuable reference map for everyone involved, but it must not be viewed as a crystal ball for predicting the future. The market after the fourth halving will be affected by the complex game of multiple forces including global macroeconomic policies (such as interest rate cycles), geopolitics, the attitude of regulatory agencies (such as the approval and development of spot ETFs), and the innovation of blockchain technology itself (such as Layer 2 expansion, new application ecology).

Therefore, understanding the nature of Bitcoin’s high volatility is the first lesson in playing this game. It is not only a disruptive technological innovation and potential value storage method, but also a high-risk asset that is not yet fully mature and is extremely vulnerable to internal and external factors. Putting Bitcoin in a reasonable position in personal asset allocation, avoiding irrational pursuit of gains and losses, and using funds within the risk tolerance range to participate may be the most rational way to survive in this new digital world full of charm and danger.