Over the past decade, Bitcoin has experienced three complete bull and bear cycles, soaring from $314 in 2015 to $126,198 in 2025, an increase of nearly 374 times. Behind this crazy growth are three core forces driving it: the halving cycle, macroeconomic environment, and large institutional purchases. Understanding these three factors can basically help grasp Bitcoin's long-term trend.

**The halving cycle is the true source of scarcity**

The mechanism of Bitcoin halving every four years fundamentally determines its supply. After the fourth halving in 2024, the block reward dropped from 6.25 BTC to 3.125 BTC, with an annual inflation rate of only 0.782%—what does this mean? Even gold's inflation rate is between 1.5% and 2%, meaning Bitcoin's current scarcity has already surpassed gold. Historical data is particularly interesting: in the 6 to 18 months after the first three halvings, Bitcoin experienced significant rallies. The increase one year after the 2012 halving was 8858%, in 2016 it was 286%, and in 2020 it was 475%. Since the 2024 halving, over a year has passed, and the increase is about 31%, with a peak reaching $109,588, a 68.75% rise. According to historical patterns, it should still be in the consolidation phase, with the previous pattern showing a period of sideways movement in the first half-year after halving, followed by a real breakout.

**Market protagonists have shifted from retail investors to institutions**

The biggest change in this cycle is the large influx of institutional players. By the end of 2024, institutional investors held 13.4% of Bitcoin, with giants like BlackRock and MicroStrategy becoming main buyers. This means Bitcoin is no longer just a speculative asset for small retail investors but is becoming part of institutional asset allocation.