Bitcoin Again Reaches $100K. Is This Leading Cryptocurrency Entering a New Price Rise Cycle?

With news of positive developments in global trade, Bitcoin (CRYPTO: BTC) has once again regained the price level of $100,000. The excitement in the crypto market is evident, and almost every top cryptocurrency is bullish as soon as the first trade agreement is announced. The new thought is that Bitcoin is about to enter one of its famous bullish phases, pushing it to a new all-time high. But is that really true? Macroeconomic Prospects While the White House's announcement of a new trade deal with the United Kingdom is certainly a reason for optimism, upon closer reading of this "deal," we see that it is essentially an agreement and tariffs will not disappear. Moreover, as skeptics point out, the United Kingdom only accounts for a small percentage of total trade with the United States, and the U.S. actually has a trade surplus with the United Kingdom. On the other hand, signing the first trade agreement with an important Asian trading partner, with whom the U.S. has a trade deficit, would be much more optimistic. It has been less than 48 hours since Fed Chairman Jerome Powell warned about slowing economic growth and rising prices due to tariffs. We have yet to see any direct economic impact from tariffs, but the warning signs on the horizon are quite concerning. If dozens of new trade deals are not signed within the next 60 days, any profits from Bitcoin could be fleeting. The Application of the Organization However, the case for Bitcoin entering a new bullish market cycle becomes much stronger when you consider the pace of institutional adoption. The best way to assess institutional adoption in action is by looking at the cash flows of investors into spot Bitcoin ETFs. These cash flows turned negative during the peak of tariff uncertainty, but have since turned positive. In fact, there is currently more money flowing into spot Bitcoin ETFs than into gold ETFs. This is particularly noteworthy, as gold has outperformed Bitcoin this year. Gold is also the only safe-haven asset that you typically want to hold during times of economic and geopolitical instability. Therefore, it says a lot that investors are currently buying more Bitcoin than gold. You can also gauge the adoption rate of organizations by monitoring the increasing number of companies adding Bitcoin to their balance sheets. Leading the way is MicroStrategy (NASDAQ: MSTR), a company currently operating under the name Strategy, which continues to accumulate Bitcoin. Additionally, there is a growing number of "MicroStrategy imitators" who are pursuing the same strategy of buying as much Bitcoin as possible. Where Are We in the Bitcoin Cycle? A new global liquidity supply, combined with a significant shift in investor sentiment, can certainly push Bitcoin higher in the short term. But for how long? To answer that question, it is important to know where we are in the Bitcoin cycle. Historically, Bitcoin follows a clearly documented four-year cycle, leading to "bullish" and "bearish" phases. The four-year cycle is not just a statistical anomaly -- it stems from the fact that Bitcoin has a halving event every four years. Based on data from the last three Bitcoin halving cycles, halving typically leads to a bullish activity phase lasting from 12 to 18 months and significant growth in the crypto market. Therefore, as an investor, all you have to do is take the nearest halving date, add any period from 12 to 18 months, and there you go! You have a pretty good idea about when the bullish market cycle will end. The end of a bullish market cycle usually occurs with a "blow-off top" -- a major speculative frenzy and market excitement, followed by a strong market correction. That is what worries me right now. The latest Bitcoin halving took place in April 2024, more than 12 months ago. Therefore, if history is any guide, we are quickly approaching the end of the current Bitcoin cycle. If the bullish phase lasts for the entire 18 months, there may be a speculative frenzy for Bitcoin purchases until November. This could lead to a repetition of what happened four years ago. In November 2021, Bitcoin reached an all-time high of $69,000 and seemed to be heading to the moon. It never achieved that. The crypto rocket never reached escape velocity and Bitcoin soon collapsed below $16,000. Buy Bitcoin for Long-Term Purposes Investors need to commit to buying Bitcoin for the long term. I cannot emphasize this enough: If you are only buying Bitcoin for potential short-term profits, you are doing it all wrong. Bitcoin is highly volatile, and therefore goes through periods of boom and bust. It is interesting that Bitcoin is currently in the "boom" phase of the cycle, but you also need to be prepared to get through the "bust" phase of the cycle. We have seen this story with Bitcoin before, and it always ends the same way.