Bitcoin (BTC) has been struggling in the past few days.
It almost touched the psychologically important $100,000 barrier last Friday, stopping just $200 short.
BTC then dropped 8% to $91,500.
This has many investors convinced that this bitcoin bull market just reached its peak.
But as I’ll show you that’s not the case. This is a buy-the-dip opportunity.
We‘re in the most-profitable part of the bitcoin cycle.
Crypto prices tend to follow a predictable 4-year cycle dictated by the bitcoin halving event.
This preprogrammed event — which automatically cuts the new supply of bitcoins in half (hence the name halving) — has created a predictable upcycle every time it’s happened.
Crypto prices tend to bottom 12–18 months before bitcoin undergoes a halving. They then rally into the halving… then rally harder in the year following the halving.
Source: ChartsBTC
BTC jumped 8,000% after the first halving… almost 30X in the year following the second one… and it handed out 6X gains after the most recent halving four years ago.
Bitcoin is right on script for this cycle. Prices bottomed 17 months before the halving and have now jumped 500%+ off the lows.
If you look at the above chart again, you’ll see that the US Presidential elections are the event that sends bitcoin soaring.
We call this part of the cycle the euphoria phase.
You could divide the bitcoin cycle into roughly four phases as such:
As the above chart shows, the euphoria phase is where things get truly silly to the upside and the lions share of the profits are made.
Euphoria phase also represents the start of the so-called altseason.
During the accumulation and growth part of the cycle, bitcoin leads the charge. Big money floods in, pushing BTC to new heights.
During the altseason, bitcoin still does well, but it’s other cryptos that really start to surge.
During the last altseason, for example, Ethereum outperformed bitcoin about 8 to 1. And many altcoins did even better.
Two altcoins worth investing in are Helium, or Hivemapper. You’ll find many more in my crypto advisory Venture.
Bottom line: now is the time to buy crypto, not to sell.
The real question investors should be asking is how long will this cycle last?
Here’s a comparison of this bitcoin bull market (black line) with the four previous ones:
You can see the current one mirrors the last two market cycles (green & blue) most closely. This would mean bitcoin should peak around October 2025.
Here’s another way to look at the 4-year cycle:
Source: AurelienOhayon on X
Again, the comparison above shows crypto prices should keep rallying higher in 2025 and peak towards the end of the year.
It’s why I recently updated my bitcoin price target to $250,000.
In August 2023, when bitcoin was trading for $27,000, I told my RiskHedge Venture members it was headed to $150,000 in this cycle.
It’s becoming more and more evident I lowballed it.
#1 We just got the most pro-crypto government ever.
No matter what you think of the election results, know this: Trump’s victory is unquestionably and extremely bullish for crypto prices.
And we don’t just have a crypto-friendly president now. Over 250 pro-crypto candidates were elected to the House. Crypto critic Sherrod Brown (the man behind the legal assault on crypto dubbed Operation Choke Point 2.0) lost his Senate seat in Ohio.
Trump also said he plans to fire hostile SEC Chairman Gary Gensler… encourage bitcoin mining in America… and create a bitcoin strategic reserve by acquiring up to 5% of all bitcoin.
This will be the most pro-crypto Congress ever.
#2: The infinite bid comes to crypto.
When tens of millions of Americans get paid every other week, they buy stocks on autopilot through retirement accounts. This creates a continuous demand for stocks and constant upward pressure on prices.
Crypto lacked this “infinite bid”… until the ETFs arrived. Now, many of the world’s largest money managers are having their clients buy and hold BTC in their 401(k)s.
And the demand is off the charts. Last week saw the largest weekly inflows on record, totaling US$3.13bn:
In total, over $100 billion have poured into crypto ETF in 2024 already.
Bottom line: I expect 2025 will be another record-breaking year for crypto. The current pullback is a buy-the-dip opportunity.
For more insights, subscribe to my investing letter The Jolt⚡.
I publish fresh research on stocks and crypto every Monday and Friday.
Also, I run a crypto advisory called Venture. You can learn more about it by clicking here.
— Stephen McBride, Chief Analyst at RiskHedge
Where are we in the bitcoin cycle? was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.