The Crypto Bullrun
The crypto market and Bitcoin (BTC) specifically have been all over social media in the past months due to skyrocketing in price and reaching a new all-time high of $103.000. Hence, a unique milestone of $100.000 has been reached which holds incredible sentimental value within the crypto community.
With major price increases like this, it is clear to say that the crypto bullrun of 2024-2025 has been fully in progress. The main catalyst for the price increase was the Bitcoin halving back in April 2024, an event where the mining rewards are halved. While miners now earn less BTC, the supply of newly created BTC is now also halved and as a result, the lower supply will cause the price of Bitcoin to shift up. This halving event happens approximately every 4 years and starts a market wide bullrun. Even though the Bitcoin halving is easily predictable, every bull run is unique in its own way.
While large gains can be made by investing in cryptocurrencies, the market remains very volatile and speculative. Often causing beginning investors to lose money because of a lack of experience and no clear exit strategy. In this article we will further explore the money flow in crypto during a bullrun, lessons from previous bull runs, what makes this bull run unique and finally an investment & exit strategy.
The money flow cycle
During a crypto bullrun which starts after the BTC halving, new money flows into Bitcoin and other cryptocurrencies. More specifically, prior cycles have shown that the flow of money consists of multiple phases. While this pattern can help and guide you in the bullrun and estimate where the money will flow to next, it is no guarantee that the same pattern occurs every bullrun.
Phase one is currently in progress which is also known as the Bitcoin dominance phase. BTC represents the cornerstone of the crypto market and currently sits at a price of $96.500 or a total market capitalization of $1.9 trillion. This is equal to 53% of the total market capitalization of crypto, sitting in at $3.6 trillion. Bitcoins price already rose more than 50% since its halving back in April 2024, where the price was around $60.000. It is important to note that going forward in the future, the gains that can be made with Bitcoin will be smaller in contrast to previous cycles. The main reason for this is that the market cap of BTC has become so large that in order for the price to skyrocket, we need hundreds of billions of dollars of cash inflow.
Notably during phase one of this bullrun, unlike any other bullrun int the past, many memecoins skyrocketed at the same time as bitcoin. Some strong performers were Dogecoin (DOGE), PEPE and Dogwifhat (WIF). The large returns were primarily driven by social media hype as well as news of Elon Musk and Donald Trump collaborating in the Department of Government Efficiency (DOGE). While memecoins thrive on strong community backing and viral attention rather than intrinsic utility, they remain highly speculative investments and not suitable for beginning investors.
Phase two starts when the Bitcoin price is stabilizing and investors are looking for alternative cryptos to invest in. As a result, both the attention and money of investors flows from Bitcoin into Ethereum (ETH). ETH is currently the 2nd largest cryptocurrency and represents a decentralized blockchain platform that enables developers to build and deploy smart contracts. Decentralized applications (dApps), DeFi, NFTs and even games can be built on this blockchain. Other projects with strong fundamentals, proven experience in the market and robust ecosystems tend to outperform Bitcoin in this phase. Besides ETH, other large caps such as XRP, Solana and BNB are also benefiting from increased adoption of decentralized finance (DeFi) and other blockchain technologies.
The third phase is also known as altcoin season, popular mid-caps and other altcoins experience exponential growth. This is due to the fact that their market caps are lower, usually below $10 billion. The money from Bitcoin and large caps flows further down the chain as investors are chasing a higher risk to reward ratio. Ultimately, causing these altcoins to skyrocket.
Finally, while it is very difficult to really determine the final phase of the bullrun, previous cycles have shown that greed tends to take over the market. Crypto is all over the news and people with zero knowledge about the asset want to enter the market, expecting unachievable returns. Memecoins, micro caps, NFTs and other speculative coins tend to be popular around this time. This final phase is often short-lived and is followed by a big drop in prices within the whole crypto market.
Lessons from previous bullruns
While each bullrun tells its own unique story due to technological innovation and regulations etc., historical data does reveal some trends that are similar in every bullrun cycle. Note that Bitcoin has experienced four bitcoin halvings so far which were in 2012, 2016 2020 and 2024. Ultimately, causing the mining reward to go from 50 BTC in 2008 to only 3.125B BTC per new block created in 2024.
Let’s take a closer look at the performance of Bitcoin throughout the years and during every bullrun. Figure 1 shows the logarithmic price of Bitcoin from 2015 to now. Furthermore, the vertical orange lines represent the weeks in where the Bitcoin halving event took place. While there are definitely some price jumps and volatility prior to the official Bitcoin halving event due to investors already buying and pricing in the positive event of the halving, the official bullrun starts after the halving. Data reveals that Bitcoin typically experiences a year to one and a half years of rapid growth, followed by a large decline in price.
In 2016, the Bitcoin price rallied almost 3000% during the bullrun, from $650 at the halving event to almost $20.000 at the end of the bullrun. This return can be found in the graph in the first blue box, representing the total performance over a specified period. The bullrun lasted approximately 525 days or almost 1.5 years and was followed by a large crash causing Bitcoin to drop over 80% in value in the following months.
2020 tells a similar story as 2016, we see price volatility prior to the bitcoin halving event which happened in May 2020. This is because Bitcoin is coming out of the bear market and is getting attention from investors again. As a result, since the halving event the price of BTC skyrocketed from $8.500 to an astonishing $69.000 at the end of the cycle. Or almost a 700% gain in a period of 560 days before the crash occurred. Once the bullrun ended, the price of Bitcoin dropped 75% over a time span of one year. Altcoins even decreased over 90% in value.
Hence, market tops are usually characterized by greed, excessive risk taking with unrealistic expectations of gains, retail euphoria and the fear of missing out (FOMO). During this period also many new and inexperienced investors enter the market that do not understand the fundamentals of crypto. Therefore, while it is difficult to truly predict the market top, these are some traits that signal the final stages of the bull market. Ultimtaely, making it an important time for investors to exercise caution and consider profit-taking strategies.
Figure 1: Logarithmic price of Bitcoin (BTC)
What is different this bullrun
While history does not repeat itself, it does rhyme. The most recent Bitcoin halving was in April 2024. Noteworthy is that before the halving event, the BTC price already had a major run up, reaching the same price level as the all-time high back in 2021 which was around $70.000. The bullrun has been in full progress for around 230 days now and Bitcoins price rallied more than 50% to a new milestone of $100.000. One could say that there are approximately 300 days left in the bullrun but it all depends on market factors, greed and market sentiment. Furthermore, phase 3 and 4 of the bullrun cycle did not start yet implying that the bullrun could continue in the next months.
But what makes this bullrun unique from the previous ones. Starting with the approval of BTC ETFs. These ETFs provide a regulated and accessible way for both retail and institutional investors to gain exposure to Bitcoin without the complexity of managing digital wallets and their private keys. Further, attracting so many new investors will add a huge amount of liquidity to the market and as a result, this money inflow could significantly stabilize and boost Bitcoin’s price over the long term.
Next, with Donald Trump becoming the US president for the next 4 years, there are speculations that the regulatory environment for cryptocurrencies may become more favorable in the near future. Trump already caused the SEC chairman Gary Gensler to step down as he was known to be anti-crypto. Gensler will be replaced by a more pro-crypto chairman. Namely, Paul Atkins. Furthermore, Trump also mentioned that he wants to create a strategic Bitcoin reserve for the US. The real question is whether this will actually happen in the future or if it is rather a buy the rumor, sell the news type of event. However, improved regulations and clearer guidelines can stimulate the adoption cryptocurrencies and innovation of blockchain technologies. Ultimately, attracting more investors along the way
Finally, as previously mentioned, memecoins (DOGE, PEPE, FLOKI) already experienced huge returns during phase one of the bullrun. This premature hype may impact the typical market dynamics, potentially diminishing the momentum that memecoins usually gain later in the cycle (phase 4). Another question that might arise is whether the money will flow from memecoins to mid-caps and altcoins later. This would make more sense because most of the memecoins have little to no utility compared to other altcoins.
Investment and exit strategy in the bullrun
We now know that there are a lot of opportunities during a crypto bullrun. Some of these include exponential growth by investing in both large and small caps as well as new trends emerging ranging from decentralized finance to AI agents. However, crypto remains a highly speculative and unregulated asset class, especially smaller caps and memecoins which are known to have sharp price swings. But even the largest assets like Bitcoin experience huge drops after the bullrun. In order to capitalize on these opportunities and prevent large losses, a consistent and strategic investment approach is needed to maximize returns and achieve your personal investment goals.
Because crypto is so volatile, I highly recommend diversifying your portfolio in both large and mid-cap altcoins. For example, invest in Bitcoin and Ethereum as they are established leaders in the market and provide a relatively safer entry point. These assets often serve as the foundation of a balanced portfolio, given their lower volatility compared to mid-caps and altcoins. Furthermore, you can invest a smaller fraction of the portfolio into altcoins that have strong fundamentals and innovative ecosystems. These coins are more likely to show larger returns than Bitcoin, especially in later phases of the bullrun. Hence, a diversified portfolio can increase returns while also mitigating extra risk.
Furthermore, one of the most difficult steps of navigating a bullrun is knowing when to take profits and when to exit the market. Investors often become too greedy and too risk seeking, thinking that the sky is the limit. As a result, these investors do not sell on time and lose all their gains during the crash at the end of the bullrun. Leaving them with nothing. Signals such as parabolic price movements, excessive media hype, euphoria and peaking greed levels can indicate that a market top may be nearby. It is crucial as an investor to set clear profit targets as well as stop-loss levels to ensure that your investment choices are taken objectively rather than based off emotions. A crucial step for a highly volatile environment like crypto.
Based on my personal experience, I suggest creating a diversified portfolio with the majority in large caps (Bitcoin, Ethereum, Solana, XRP, etc.) and a smaller percentage in altcoins. Hence, this way you get a better risk/return ratio. The next step is to set clear profit targets and determine how much you want to sell of your position. Note make sure that the profit targets are realistic. To better visualize what your investment goals are, think about what you want to do with your profits. For example, do you want to buy a new car, holidays, have a fancy dinner with the family, etc. One popular strategy is to cash out 50% of your position once that cryptocurrency made a 100% gain. This way you get back you initial deposit that you put into the coin and therefore, you only have your “profits” left in the respective asset. You can either cash these out over time, swap them into Bitcoin or even keep them for the long run.
You are free to do what you want based on your financial goals and risk tolerance but make sure you remain committed to your exit strategy. This bullrun could mark a pivotal moment in building wealth and advancing the adoption of blockchain technology. However, as with any investment, staying informed and managing risk are key to success in the volatile world of cryptocurrency.
The Crypto Bullrun
The crypto market and Bitcoin (BTC) specifically have been all over social media in the past months due to skyrocketing in price and reaching a new all-time high of $103.000. Hence, a unique milestone of $100.000 has been reached which holds incredible sentimental value within the crypto community.
With major price increases like this, it is clear to say that the crypto bullrun of 2024-2025 has been fully in progress. The main catalyst for the price increase was the Bitcoin halving back in April 2024, an event where the mining rewards are halved. While miners now earn less BTC, the supply of newly created BTC is now also halved and as a result, the lower supply will cause the price of Bitcoin to shift up. This halving event happens approximately every 4 years and starts a market wide bullrun. Even though the Bitcoin halving is easily predictable, every bull run is unique in its own way.
While large gains can be made by investing in cryptocurrencies, the market remains very volatile and speculative. Often causing beginning investors to lose money because of a lack of experience and no clear exit strategy. In this article we will further explore the money flow in crypto during a bullrun, lessons from previous bull runs, what makes this bull run unique and finally an investment & exit strategy.
The money flow cycle
During a crypto bullrun which starts after the BTC halving, new money flows into Bitcoin and other cryptocurrencies. More specifically, prior cycles have shown that the flow of money consists of multiple phases. While this pattern can help and guide you in the bullrun and estimate where the money will flow to next, it is no guarantee that the same pattern occurs every bullrun.
Phase one is currently in progress which is also known as the Bitcoin dominance phase. BTC represents the cornerstone of the crypto market and currently sits at a price of $96.500 or a total market capitalization of $1.9 trillion. This is equal to 53% of the total market capitalization of crypto, sitting in at $3.6 trillion. Bitcoins price already rose more than 50% since its halving back in April 2024, where the price was around $60.000. It is important to note that going forward in the future, the gains that can be made with Bitcoin will be smaller in contrast to previous cycles. The main reason for this is that the market cap of BTC has become so large that in order for the price to skyrocket, we need hundreds of billions of dollars of cash inflow.
Notably during phase one of this bullrun, unlike any other bullrun int the past, many memecoins skyrocketed at the same time as bitcoin. Some strong performers were Dogecoin (DOGE), PEPE and Dogwifhat (WIF). The large returns were primarily driven by social media hype as well as news of Elon Musk and Donald Trump collaborating in the Department of Government Efficiency (DOGE). While memecoins thrive on strong community backing and viral attention rather than intrinsic utility, they remain highly speculative investments and not suitable for beginning investors.
Phase two starts when the Bitcoin price is stabilizing and investors are looking for alternative cryptos to invest in. As a result, both the attention and money of investors flows from Bitcoin into Ethereum (ETH). ETH is currently the 2nd largest cryptocurrency and represents a decentralized blockchain platform that enables developers to build and deploy smart contracts. Decentralized applications (dApps), DeFi, NFTs and even games can be built on this blockchain. Other projects with strong fundamentals, proven experience in the market and robust ecosystems tend to outperform Bitcoin in this phase. Besides ETH, other large caps such as XRP, Solana and BNB are also benefiting from increased adoption of decentralized finance (DeFi) and other blockchain technologies.
The third phase is also known as altcoin season, popular mid-caps and other altcoins experience exponential growth. This is due to the fact that their market caps are lower, usually below $10 billion. The money from Bitcoin and large caps flows further down the chain as investors are chasing a higher risk to reward ratio. Ultimately, causing these altcoins to skyrocket.
Finally, while it is very difficult to really determine the final phase of the bullrun, previous cycles have shown that greed tends to take over the market. Crypto is all over the news and people with zero knowledge about the asset want to enter the market, expecting unachievable returns. Memecoins, micro caps, NFTs and other speculative coins tend to be popular around this time. This final phase is often short-lived and is followed by a big drop in prices within the whole crypto market.
Lessons from previous bullruns
While each bullrun tells its own unique story due to technological innovation and regulations etc., historical data does reveal some trends that are similar in every bullrun cycle. Note that Bitcoin has experienced four bitcoin halvings so far which were in 2012, 2016 2020 and 2024. Ultimately, causing the mining reward to go from 50 BTC in 2008 to only 3.125B BTC per new block created in 2024.
Let’s take a closer look at the performance of Bitcoin throughout the years and during every bullrun. Figure 1 shows the logarithmic price of Bitcoin from 2015 to now. Furthermore, the vertical orange lines represent the weeks in where the Bitcoin halving event took place. While there are definitely some price jumps and volatility prior to the official Bitcoin halving event due to investors already buying and pricing in the positive event of the halving, the official bullrun starts after the halving. Data reveals that Bitcoin typically experiences a year to one and a half years of rapid growth, followed by a large decline in price.
In 2016, the Bitcoin price rallied almost 3000% during the bullrun, from $650 at the halving event to almost $20.000 at the end of the bullrun. This return can be found in the graph in the first blue box, representing the total performance over a specified period. The bullrun lasted approximately 525 days or almost 1.5 years and was followed by a large crash causing Bitcoin to drop over 80% in value in the following months.
2020 tells a similar story as 2016, we see price volatility prior to the bitcoin halving event which happened in May 2020. This is because Bitcoin is coming out of the bear market and is getting attention from investors again. As a result, since the halving event the price of BTC skyrocketed from $8.500 to an astonishing $69.000 at the end of the cycle. Or almost a 700% gain in a period of 560 days before the crash occurred. Once the bullrun ended, the price of Bitcoin dropped 75% over a time span of one year. Altcoins even decreased over 90% in value.
Hence, market tops are usually characterized by greed, excessive risk taking with unrealistic expectations of gains, retail euphoria and the fear of missing out (FOMO). During this period also many new and inexperienced investors enter the market that do not understand the fundamentals of crypto. Therefore, while it is difficult to truly predict the market top, these are some traits that signal the final stages of the bull market. Ultimtaely, making it an important time for investors to exercise caution and consider profit-taking strategies.
Figure 1: Logarithmic price of Bitcoin (BTC)
What is different this bullrun
While history does not repeat itself, it does rhyme. The most recent Bitcoin halving was in April 2024. Noteworthy is that before the halving event, the BTC price already had a major run up, reaching the same price level as the all-time high back in 2021 which was around $70.000. The bullrun has been in full progress for around 230 days now and Bitcoins price rallied more than 50% to a new milestone of $100.000. One could say that there are approximately 300 days left in the bullrun but it all depends on market factors, greed and market sentiment. Furthermore, phase 3 and 4 of the bullrun cycle did not start yet implying that the bullrun could continue in the next months.
But what makes this bullrun unique from the previous ones. Starting with the approval of BTC ETFs. These ETFs provide a regulated and accessible way for both retail and institutional investors to gain exposure to Bitcoin without the complexity of managing digital wallets and their private keys. Further, attracting so many new investors will add a huge amount of liquidity to the market and as a result, this money inflow could significantly stabilize and boost Bitcoin’s price over the long term.
Next, with Donald Trump becoming the US president for the next 4 years, there are speculations that the regulatory environment for cryptocurrencies may become more favorable in the near future. Trump already caused the SEC chairman Gary Gensler to step down as he was known to be anti-crypto. Gensler will be replaced by a more pro-crypto chairman. Namely, Paul Atkins. Furthermore, Trump also mentioned that he wants to create a strategic Bitcoin reserve for the US. The real question is whether this will actually happen in the future or if it is rather a buy the rumor, sell the news type of event. However, improved regulations and clearer guidelines can stimulate the adoption cryptocurrencies and innovation of blockchain technologies. Ultimately, attracting more investors along the way
Finally, as previously mentioned, memecoins (DOGE, PEPE, FLOKI) already experienced huge returns during phase one of the bullrun. This premature hype may impact the typical market dynamics, potentially diminishing the momentum that memecoins usually gain later in the cycle (phase 4). Another question that might arise is whether the money will flow from memecoins to mid-caps and altcoins later. This would make more sense because most of the memecoins have little to no utility compared to other altcoins.
Investment and exit strategy in the bullrun
We now know that there are a lot of opportunities during a crypto bullrun. Some of these include exponential growth by investing in both large and small caps as well as new trends emerging ranging from decentralized finance to AI agents. However, crypto remains a highly speculative and unregulated asset class, especially smaller caps and memecoins which are known to have sharp price swings. But even the largest assets like Bitcoin experience huge drops after the bullrun. In order to capitalize on these opportunities and prevent large losses, a consistent and strategic investment approach is needed to maximize returns and achieve your personal investment goals.
Because crypto is so volatile, I highly recommend diversifying your portfolio in both large and mid-cap altcoins. For example, invest in Bitcoin and Ethereum as they are established leaders in the market and provide a relatively safer entry point. These assets often serve as the foundation of a balanced portfolio, given their lower volatility compared to mid-caps and altcoins. Furthermore, you can invest a smaller fraction of the portfolio into altcoins that have strong fundamentals and innovative ecosystems. These coins are more likely to show larger returns than Bitcoin, especially in later phases of the bullrun. Hence, a diversified portfolio can increase returns while also mitigating extra risk.
Furthermore, one of the most difficult steps of navigating a bullrun is knowing when to take profits and when to exit the market. Investors often become too greedy and too risk seeking, thinking that the sky is the limit. As a result, these investors do not sell on time and lose all their gains during the crash at the end of the bullrun. Leaving them with nothing. Signals such as parabolic price movements, excessive media hype, euphoria and peaking greed levels can indicate that a market top may be nearby. It is crucial as an investor to set clear profit targets as well as stop-loss levels to ensure that your investment choices are taken objectively rather than based off emotions. A crucial step for a highly volatile environment like crypto.
Based on my personal experience, I suggest creating a diversified portfolio with the majority in large caps (Bitcoin, Ethereum, Solana, XRP, etc.) and a smaller percentage in altcoins. Hence, this way you get a better risk/return ratio. The next step is to set clear profit targets and determine how much you want to sell of your position. Note make sure that the profit targets are realistic. To better visualize what your investment goals are, think about what you want to do with your profits. For example, do you want to buy a new car, holidays, have a fancy dinner with the family, etc. One popular strategy is to cash out 50% of your position once that cryptocurrency made a 100% gain. This way you get back you initial deposit that you put into the coin and therefore, you only have your “profits” left in the respective asset. You can either cash these out over time, swap them into Bitcoin or even keep them for the long run.
You are free to do what you want based on your financial goals and risk tolerance but make sure you remain committed to your exit strategy. This bullrun could mark a pivotal moment in building wealth and advancing the adoption of blockchain technology. However, as with any investment, staying informed and managing risk are key to success in the volatile world of cryptocurrency.