WORLD ECONOMIC JOURNAL
• Bull markets are characterised by a continuous and sustained rise in asset prices . These phases are generally fueled by strong demand , investor optimism , and favourable economic conditions . In cryptocurrencies , these periods are often marked by intense media coverage , a massive influx of new investors and valuations reaching all-time highs .
• Bear markets are marked by a prolonged decline in prices . These phases occur when investor confidence wanes , leading to massive sell-offs . In the context of cryptocurrencies , these periods can be exacerbated by unfavourable regulations , exchange platform hacks or corrections following a speculative bubble .
Bitcoin ( BTC ), as the first and leading cryptocurrency , provides a perfect case study to illustrate these cycles . Since its creation in 2009 , Bitcoin has experienced several bull and bear cycles :
• 2013-2014 : Bitcoin rose from under $ 100 at the beginning of 2013 to over $ 1,100 in December of the same year , before falling to around $ 200 in 2015 . This first cycle was marked by the euphoria surrounding early adopters and the initial acceptance of Bitcoin by companies like Overstock . com .
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• 2017-2018 : The most iconic cycle , where Bitcoin nearly reached $ 20,000 in December 2017 , followed by a sharp drop in 2018 , hitting a low of $ 3,200 in December of that year . This cycle was marked by widespread enthusiasm for ICOs ( Initial Coin Offerings ) and the massive entry of new retail investors .
• 2020-2021 : After a long accumulation period , Bitcoin began a new bull cycle , reaching an all-time high of around $ 69,000 in November 2021 . This cycle was supported by increased institutional interest , growing recognition of Bitcoin as a reserve asset , and the economic crisis triggered by the COVID-19 pandemic .
• 2022-2023 : The last significant bear market in the cryptocurrency market , often referred to as the " crypto winter ," began in late 2021 . The market saw a sharp decline of Bitcoin and other cryptocurrencies amid widespread market uncertainty and a decrease in trading volumes . Macroeconomic concerns , regulatory pressures and the collapse of major crypto projects — like Terra ( LUNA ) and the FTX exchange — contributed to the downturn .
Maxime Duhommet is a quantitative trader based in Paris . He is co-head of Davensi , a crypto platform and digital asset manager , developing a fullyregulated and independent exchange in Europe ( Davensi . com )
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