It’s Bitcoin’s 15th birthday. Bitcoin has had three main cycles in its lifetime. We see the cycle around the 2011-2013 bear market followed by a bull, and so this pattern happens two more times, around early 2015 and again a few years later, which tends to place us currently. These cycles can occur so quickly because crypto never sleeps when trading 24/7.
Bitcoin Leads the Charge
In past cycles, Bitcoin has kicked off things for the bulls, basically bringing confidence in investors to buy and opening paths on which some altcoins will soon follow. At the time of writing, Bitcoin is still showing dominance in the market, and this means that there might be further growth to go before other altcoins catch up.
Altcoins’ Outperformance
During past market cycles, altcoins saw blistering rallies in the late stages of the cycle. They were outperformed by Bitcoin only after its price had grown so high that other players entering into a slightly different quadrant would have pushed them down even further. Part 2: Founders Should Pay Attention For example, altcoins offered a t return compared to Bitcoin’s x in (Alyssa Hertig/Coindesk). More of this cycle may repeat, and altcoin fundamentals are starting to outshine and perhaps perform better in the second half.
Macro Economic Influences
Global liquidity conditions are a significant factor in crypto. Those increases are less dramatic than in previous cycles, which have seen liquidity up 30% to 50%. A few words from Powell drove recent selloffs tighter, but a Fed rate cut and some policy changes could propel the market.
Looking Ahead
However, based on previous trends, this cycle may be different. The mainstream adoption through the ETFs, BTCE (de. only), ETH, etc., by investing in Ethereum or at least considering it means a peak load of institutional investment is well appreciated. But the competition with altcoins and potential dilution from now on might be more pressing—survival of the technology and user experience.
Conclusion
While history never quite repeats, looking at the recurring patterns of previous cycles can be extremely helpful in understanding what market dynamics we may expect to observe — such as an altcoin rally driven by macroeconomic factors and broader market trends.
