Since its inception in 2009, Bitcoin has attracted attention for its extreme price volatility and unique cyclical patterns. Historically, Bitcoin's halving event every four years (i.e., halving mining rewards) has always been closely linked to subsequent explosive bull markets, but at the same time, it has also experienced multiple drops of over 50%, highlighting the coexistence of high risk and high potential returns.

Halving and Bull Market: A Continuously Verified Law

Bitcoin halving reduces the speed of new coin production, historically triggering expectations of supply contraction, thereby pushing prices up. This mechanism has been verified through three cycles of the market.

After the first halving in November 2012, Bitcoin soared from $10 to $1,000 in 2013, an increase of 100 times.

After the second halving in July 2016, the 2017 bull market pushed its price from $400 to $20,000, setting a new historical high at the time.

After the third halving in May 2020, the 2021 bull market pushed Bitcoin from $9,000 to $69,000.

On April 20, 2024, Bitcoin completed its fourth halving, with the price on that day being approximately $63,914. The market is closely watching its subsequent trends, attempting to verify whether this pattern will reoccur.

History of Crashes: Risk has Never Been Far Away

However, Bitcoin's growth journey is also fraught with thorns, with at least six crash events warning investors of its vulnerability.

In June 2011, Bitcoin plummeted from $32 to $0.01, a drop of 99%, mainly due to the hack of the Mt. Gox exchange, exposing the immaturity of the early market.

2013-2014 consecutive crashes: first due to a risk warning from the Chinese central bank, the price fell from $1,166 to $170 (an 85% drop); then, 850,000 Bitcoins were stolen from Mt. Gox, causing another 58% drop.

In the 2018 bear market, Bitcoin fell from $20,000 to $3,122, a drop of 84%, mainly due to the bursting of the ICO bubble and tightening global regulations.

On March 12, 2020, 'Black Thursday', the COVID-19 pandemic triggered global panic, causing Bitcoin to drop from $9,000 to $3,850 within 24 hours, a drop of over 50%;

In 2021, there were two corrections: China's ban on mining caused the price to drop from $64,000 to $30,000; expectations of Fed rate hikes further pushed it down from $40,000 to $29,000.

In 2022, the LUNA crash triggered a chain reaction, compounded by Fed rate hikes, causing Bitcoin to fall from $48,000 to $16,300, a drop of 66%.

The most recent crash occurred in February 2025, due to geopolitical tensions and a plunge in tech stocks, with Bitcoin falling 6.83% in a single day to $91,130, while mainstream coins like Ethereum dropped over 20%.

Summary of Patterns: The Duality of Opportunity and Risk

The Bitcoin market exhibits clear cyclicality: halving events give rise to bull markets, but each bull market is often accompanied by more than 80% deep corrections, with bear market cycles usually lasting 1-2 years. Factors triggering crashes are diverse, including policy regulation (e.g., China's ban), security incidents (e.g., exchange hacks), macroeconomic crises (e.g., rate hikes, pandemics), and industry-specific risks (e.g., algorithmic stablecoin failures).

For investors, history provides a reference but is not a guarantee of future performance. The trajectory after Bitcoin's fourth halving remains influenced by multiple factors such as macroeconomic environment, regulatory developments, and technological innovations. Understanding its high volatility nature and rationally allocating assets is the sensible approach to cope with this high-risk, high-return market.