There were only three halves in Bitcoin, namely in November 2012, in July 2016, and in May 2020.
To date, three large speculative bubbles have formed in the crypto markets. Actually, many more have formed, but they have often been short-lived, limited to only a few cryptocurrencies, or not particularly large.
Those that were huge, extensive, and above all long, were only three. And in all cases, they occurred the year after the one in which a Bitcoin halving occurred.
The three bubbles produced after the three halves of Bitcoin are described below.
First of the Three Crypto Bubbles
The first major crypto market asset bubble occurred in 2013, that is, the year after the first Bitcoin halving. It affected the entire crypto market and lasted more than 12 months. In fact, the rebound followed the 2011 bubble burst, so 2011/2013 bull run effectively lasted two years.
At the time of the Bitcoin halving in November 2012, the crypto market had a capitalization of less than $150 million, of which more than 90% consisted of bitcoins. The great speculative bubble of 2013 caused this capitalization to even reach 16,000 million dollars at its peak, between November and December.
In other words, in about thirteen months, the increase was almost 12,000%. Therefore, it was for all intents and purposes a gigantic bubble, very extended, and with a remarkable duration. In 2013, Ethereum did not yet exist, while Ripple and Litecoin did.
The Second Crypto Bubble
At the end of May 2016, in view of the halving, the crypto market capitalization had already risen to $10 billion, and it began to skyrocket again in October of that year. During that speculative bubble, Ethereum played an important role, contributing to the reduction of Bitcoin’s dominance.
The peak of that cycle was reached in early January 2018, although the price of Bitcoin reached it in mid-December 2017, with a total market capitalization exceeding $800 billion. Compared to 3.1 billion in January 2015, growth had been 26,000%, while post-halving growth was 6,000%.
The Third Bubble
In May 2020 the third halving took place, and in October of the same year, the last great bull run was triggered. Its climax was in November 2021, when the crypto market touched $3 trillion, or an increase of 2,900% compared to the 2018 low, and 667% compared to October 2020. From the November 2021 peak, the overall crypto market capitalization fell to $780 billion in November 2022, a much smaller 74% loss than in the previous two bubbles.
According to the evidence explained above, the crypto markets have expanded a lot over the years, and perhaps that is also why the bubbles have become more and more contained.
By Audy Castaneda
