history repeating or a new chapter in crypto?

Defying skeptics, Bitcoin (BTC) has nearly reached the once unimaginable $100,000 milestone after trading at $0.0009 in 2009. Just a few years ago, only the most optimistic people in the industry could have imagined that Bitcoin would approach $100,000; but now this vision is still at the same level. Striking distance despite a pullback above $99,000 late last week.

Let’s examine Bitcoin’s past all-time high cycles and how they compare to the current phase in its growth trajectory. Understanding the patterns behind Bitcoin’s all-time high behavior is key to predicting whether history will repeat itself.

The real question is: Will it happen again? Or are we in a unique moment akin to futurist Ray Kurzweil’s vision of artificial intelligence surpassing human intelligence? What if Bitcoin, like the artificial intelligence in this scenario, enters uncharted territory, forcing us to imagine a future beyond our current understanding?

Bitcoin’s boom and bust cycles: a historical overview

Bitcoin’s price history has been defined by sharp rises to all-time highs followed by significant corrections. Here’s an overview of notable ATHs and their results.

Let’s start with 2013, when the crypto king reached $266 in April, but fell nearly 75% to $65 within a few weeks. Later that year, it spiked to $1,150 in December and entered a prolonged bear market, falling nearly 85% to $170 in January 2015. Market speculation, regulatory uncertainty and Mt. Gox’s collapse was said to have led to such prices. action.

Continuing its path of tops and bottoms, Bitcoin reached a staggering all-time high of $20,000 in December 2017, thanks to the retail investment frenzy and the growing popularity of Initial Coin Offerings.

However, this was followed by a sharp correction, with Bitcoin falling by 84% by December 2018. When the unrealistic promises of the projects went unfulfilled, the ICO bubble collapsed like a house of cards, leaving investors in the dumps of hype. It will only be thrown away once the plans are resolved.

Although pump-and-dump schemes played an important role, they were only part of the problem. What initially appeared to be a rapidly expanding market quickly turned unhealthy after the Securities and Exchange Commission declared many ICOs to be unregistered securities, and even standout startups struggled to stay afloat.

These factors, combined with market oversaturation and investor fatigue, caused the once booming ICO market to collapse. This correction not only erased billions of dollars in value, but also dragged the price of Bitcoin to levels not seen since the previous cycle, where it stood at $3,200 at the end of 2018.

Such market exhaustion following rapid growth contributed to a prolonged bear market that was later labeled the ‘crypto winter’ and lasted until mid-2020, when Bitcoin and other cryptocurrencies began their next significant rally.

However, despite the severity of the crisis, this appeared to be a blessing in disguise, as the bear market spurred serious projects focused on creating and developing blockchain technology. During this period, the foundation was laid for innovations that would emerge in later cycles, such as decentralized finance and non-fungible tokens.

In 2021, Bitcoin has experienced a rollercoaster of ups and downs marked by two all-time highs and sharp corrections. In April, Bitcoin reached an ATH of $64,000, supported by increasing institutional adoption and excitement in the crypto market.

But by July, it had fallen 50% to $30,000 due to concerns about profit-taking and regulatory pressures. The market rebounded later in the year, reaching an ATH of $69,000 in November, but this was short-lived.

A prolonged bear market followed, with Bitcoin falling 77% to $15,500 by November 2022. As we can see, external shocks constantly play a role in puncturing Bitcoin’s speculative bubbles. The 2021-2022 crash was a perfect storm of rising interest rates coupled with spectacular crypto industry crashes like those of Terra and FTX.

This was history repeating itself once again, with the post-2022 bear market preparing the industry for the current phase of growth with a focus on regulatory clarity, layer 2 solutions and enterprise-level infrastructure.

Bitcoin’s growth cycles have become increasingly longer, from 334 days in 2013 to 1,065 days in 2017 and 610 days in 2021. Similarly, correction periods have been consistent at around one year for recent cycles, reflecting a trend towards longer, more stable market phases. The cryptocurrency market is maturing.

Although corrections remained steep, the magnitude of the fluctuations was decreasing as institutional players began to stabilize the market.

What makes the current cycle different?

So what are we witnessing now? Once dismissed as a scam, a fad, or something Wall Street could never touch, Bitcoin is now proving its critics wrong. There is a clear shift in the Bitcoin narrative from being a speculative asset to being ‘digital gold’ or a long-term store of value.

In November 2024 alone (and the month isn’t over yet) spot Bitcoin ETFs have already generated a staggering $30.814 billion in cumulative net inflows from BlackRock, Fidelity, Valkyrie, VanEck, Invesco, Bitwise, Franklin Templeton, WisdomTree and ARK Invest . .

These ETFs exhibited significant daily activity; BlackRock ranked first by accumulating $31.333 billion during the month, followed by Fidelity with $11.538 billion and Bitwise with $2.432 billion. Their presence greatly reduced volatility and contributed to market stability.

Bitcoin spot ETF total cumulative flow | Source: Faside Investors

Additionally, publicly traded companies are increasingly incorporating Bitcoin into their corporate treasuries. Collectively, public companies, primarily US-based companies, currently hold 361,991 BTC, representing 1.83% of Bitcoin’s total supply and worth approximately $34.76 billion, according to CoinGecko data.

MicroStrategy remains the clear leader, holding an impressive 252,220 BTC, representing over 70% of the total Bitcoin held by publicly traded companies and 1,201% of Bitcoin’s total supply.

After MicroStrategy, Marathon Digital Holdings ranks second with 26,842 BTC, while Galaxy Digital Holdings ranks third with 15,449 BTC. Tesla remains a major player in fourth place with 11,509 BTC.

Top public companies by BTC holdings| Data taken from CoinGecko

According to the Sygnum Future Finance 2024 survey, institutional investors increasingly view digital assets as a critical component of their portfolios; 57% are planning more allocations and 81% are looking for better information to guide their strategies.

The Glassnode report highlights how institutional capital inflows, particularly through US Spot ETFs, are reshaping the Bitcoin market by stabilizing price movements and absorbing selling pressure. Over the past 30 days, ETFs absorbed 128,000 BTC, accounting for 93% of the 137,000 BTC sold by long-term holders during this period. Weekly inflows into Bitcoin ETFs increased to $1-2 billion, which played an important role in maintaining liquidity and supported the rise to $93,200.

Long-term Bitcoin holder and US spot ETF balances position change | Source: Glassnode

However, as long-term holders still control 14 million BTC, increased profit-taking activities pose a challenge to institutional demand, which will be critical in determining whether the current rally can maintain its momentum.

Bitcoin’s Path to $100,000

According to Bitcoin options data, open interest reflects a strong focus on higher strike prices, with significant activity concentrated around the $100,000 and $120,000 levels. At the $100,000 strike price, open interest shows 20.60k call options compared to 1.53k put options, indicating a strong uptrend.

The market value of the calls is $159.45 million, significantly outpacing the put market value of $13.43 million for a total notional value of $2.12 billion.

Bitcoin option interest based on strike price | Source: CoinGlass

Similarly, the $120,000 strike shows 764.5 put options versus 18.31 thousand call options; total notional value is $1.83 billion and call market value is $115.29 million. The overwhelming prevalence of calls at these high strike prices continues to reflect strong market optimism regarding Bitcoin’s ability to reach or exceed these levels.

shutting down thoughts

Bitcoin’s journey towards $100,000 showcases a remarkable evolution that blends historical patterns with unprecedented levels of institutional adoption and market maturity.

The impressive milestones achieved this November, such as the $30.814 billion inflow into Bitcoin ETFs, the significant accumulation of 361,991 BTC by publicly traded companies, and the $2.12 billion open interest at a $100,000 strike price, underscore a market that has evolved beyond speculation into a reliable asset class .

Whether Bitcoin’s rally is fueled by a repeat of history or a re-creation, one thing is certain: the path to $100,000 is no longer a matter of “if” but “when.” The question is to what extent the world can embrace this while continuing to challenge the foundations of traditional systems.