Since its inception in 2009, Bitcoin has experienced multiple cyclical surges. These increases are not random but driven by specific market events, policy changes, and participant behavior patterns. Understanding the mechanisms behind these cycles is crucial for participants seeking to profit in the crypto market.
What drives Bitcoin's cyclical rallies?
Bitcoin's strong cyclical rallies (commonly referred to as bull runs) are typically triggered by several key factors: supply constraints, increased institutional participation, shifts in regulatory attitudes, and macroeconomic environment dynamics.
Historically, Bitcoin's halving events (which occur every four years and halve the rate of new coin issuance) are the most consistent catalysts for price increases. After the 2012 halving, Bitcoin's price rose from about $5 to over $1,100, a 5,200% increase. Following the 2016 halving, the price increased by 315%.