How the Bitcoin Bull Market Cycle Stands

As markets enter Q4 2024, investors are paying attention to the current bitcoin market cycle, wondering if it will reflect historical trends. Typically, halving events every four years punctuate these cycles, each marked by a sharp supply cut. However, today’s demand and supply dynamics, regulatory changes, and external market shocks suggest that this cycle may be different.

Background Key

Historically, bitcoin’s bull market was largely driven by dwindling water supplies, and coins were either held for a long time or thought to be lost. The circulating supply of Bitcoin currently stands at about 19.7 million coins, with an estimated 5 million out of circulation forever.

This leaves approximately 14.6 million BTC classified as illiquid—held in wallets with little intention of trading. More than 73% of the total supply is inactive, reducing the number of coins available for active trading and suggesting a market capitalization similar to the times before the rush. of historical bulls.

Energy Supply and Market Processes

The cycle diverges as major shareholders such as Grayscale sell their holdings in bitcoin, responding to competition from lower-fee ETFs.

Despite this increase in short-term liquidity, the broader trend is seeing organizations like MicroStrategy and various new ETFs accumulate huge amounts of bitcoin, which could cause lack of supply. The ratio of bitcoin funds has dropped below 0.25, indicating that more circulating coins are being effectively removed from the trading pool as institutional and long-term funds increase.

M2 Money Supply And The Big Picture

The broader economic environment, particularly M2 money supply movements, has long been correlated with bitcoin price cycles. The recent expansion of M2, after a phase of reduction, is considered by some analysts to be the cause of the growth of bitcoin in the coming months.

Central banks that may move to reduce the rate of pressure to reduce the economic slowdown may improve the appeal of bitcoin as an inflation hedge, which may accelerate the appreciation of its price. In addition, the US dollar index, also known as DXY, remains an important issue; A big drop can increase the growth of bitcoins.

Emerging Issues in Global Adoption

Another thing that makes this cycle different is the rise of global acceptance and interest from national countries. Countries like El Salvador and places with economic instability are turning to bitcoin as a legal asset or a storage asset. While it is still young, this acceptance can lead to greater stability and credibility for bitcoin, changing its market perception from a speculative commodity to a true store of value.

Along with political conflicts and financial sanctions, bitcoin becomes a hedge against inflation and independent risk, which may increase the acceleration of its accumulation in organizations and the government. This major change towards bitcoin as a global, non-independent currency is a remarkable development that shows the strong, stable market power, which makes this cycle different from its predecessors.

Concepts and Effects

Although some experts predict that Q2 2025 is the peak of the cycle, the unique conditions of this cycle provide a cautious outlook.

The continued increase in illegal supply supports long-term containment strategies, without incentives such as institutional price increases or favorable economic conditions, during this phase of collect is still unknown. Regulation and possible changes in US monetary policy could add more stability to the market.

Additional Details

World money has increased by $ 10 trillion since the beginning of the year, which is a development strong enough to buy all bitcoin ten times. This increase in global debt has not been immediately reflected in the price of bitcoin, which shows a sharp drop in the amount of these currencies into different asset classes.

The FTX product shortened the last bull run and prevented bitcoin from reaching $100,000. Now, the fees associated with FTX can serve as a source of activity for the next cycle, possibly driving bitcoin to the value of $100,000.

Strategic Takeaways

For investors, decision factors include weighing the slow pace of the current market against expectations of a more defined improvement. As big players like Grayscale reduce their holdings and others like ETFs and MicroStrategy increase their holdings, timing and strategy will be critical.

The underlying principles of the bitcoin deflationary model and the growing institutional interest suggest that despite possible deviations from past trends, the fundamental strength of bitcoin remains he is strong. Only time will reveal how this market cycle plays out, but the current signs suggest a more distinct and clear bull run.