Will Bitcoin (BTC) Continue Its Bull Market Run to New All-Time Highs?

Bitcoin (BTC 0.54%) once again rose above the $100,000 price level on news of positive developments on the global trade front. The euphoria in the crypto market was palpable, and just about every top cryptocurrency moved higher as soon as the first trade deal was announced.

The new thinking is that Bitcoin is about to go on another one of its famous bull market runs, taking it to new all-time highs. But is that really the case?

Macroeconomic outlook

While the White House's announcement of a new trade deal with the U.K. is certainly reason for optimism, a closer reading of the "deal" reveals that it is really more of an agreement, and that tariffs are not going away.

Moreover, as skeptics are pointing out, Great Britain accounts for only a small percentage of all U.S. trade, and the U.S. actually has a trade surplus with Great Britain. On the other hand, signing the first trade deal with a key Asian trading partner, with whom the U.S. had a trade deficit, would have been much more bullish.

Image source: Getty Images.

It's also been less than 48 hours since Fed Chairman Jerome Powell warned of slowing economic growth and higher prices as a result of tariffs. We haven't seen any direct economic effects from the tariffs yet, but the warning signs on the horizon are ominous. If dozens of new trading deals aren't signed within the next 60 days, any gains in Bitcoin could be fleeting.

Institutional adoption

However, the case for Bitcoin entering a new bull market cycle becomes much stronger when you consider the pace of institutional adoption. The best way to see institutional adoption in action is by looking at investor inflows into the spot Bitcoin ETFs. These inflows turned negative during the peak of tariff uncertainty, but have since turned positive.

In fact, there's now more money flowing into the spot Bitcoin ETFs than into gold ETFs. That's particularly striking, given that gold has outperformed Bitcoin this year. Gold is also the one safe haven asset that you typically want to be holding during times of economic and geopolitical uncertainty. So it speaks volumes that investors now appear to be buying more Bitcoin than gold.

You can also measure the pace of institutional adoption by tracking the growing number of corporations adding Bitcoin to their balance sheets. Leading the way is MicroStrategy (MSTR 0.40%), the company now doing business as Strategy, which continues to load up on Bitcoin. There are also a growing number of "MicroStrategy copycats," which are following the same strategy of buying as much Bitcoin as they can.

Where are we in the Bitcoin cycle?

A new infusion of global liquidity, combined with a sea change in investor sentiment, can certainly push Bitcoin higher in the short term. But for how long?

To answer that question, it's important to know where we are in the Bitcoin cycle. Historically, Bitcoin follows a well-documented four-year cycle, which leads to periods of "boom" and "bust." The four-year cycle is more than just a statistical oddity -- it follows from the fact that Bitcoin has a halving event every four years.

Based on data from three previous Bitcoin cycles, the halving typically leads to a 12- to 18-month period of bullish activity and outsized market gains. So, as an investor, all you have to do is take the date of the last halving, add on anywhere from 12 to 18 months, and presto! You have a pretty good idea of when the bull market cycle is going to end. The ending of the bull market cycle typically happens with a "blowoff top" -- a massive frenzy of speculative froth and market euphoria, followed by a steep market correction.

That's what has me worried right now. The last Bitcoin halving took place in April 2024, more than 12 months ago. So, if history is any guide, then we are quickly approaching the end of the current Bitcoin cycle. If the period of bullish activity lasts for the full 18 months, there could be a speculative frenzy of Bitcoin buying activity until November.

This could lead to a repeat of what happened four years ago. In November 2021, Bitcoin hit a then all-time high of $69,000 and seemed to be headed to the moon. It never made it there. The crypto rocket ship never reached escape velocity, and Bitcoin soon collapsed below $16,000.

Buy Bitcoin for the long haul

Investors need to commit to buying Bitcoin for the long haul. I can't emphasize this enough: If you are only buying Bitcoin for the potential short-term gains, you are doing it all wrong.

Bitcoin is highly volatile, and so goes through boom-and-bust cycles. It's exciting when Bitcoin is in the "boom" part of