The price of Bitcoin is often characterized by significant volatility. Its value can fluctuate considerably depending on market variations or on bullish and bearish phases, just like any other financial market.

To put it simply, humans tend to buy everything at once and sell everything at once. Bitcoin is not immune to human nature.

Both the development and the evolution of Bitcoin are largely linked to the different groups of actors who have gradually integrated its ecosystem.

The early users of Bitcoin were mainly technophiles, cypherpunks, libertarians, and gold enthusiasts. These groups were attracted to it because of its value as trustless electronic cash, its resistance to censorship, and its transparent, immutable monetary policy.

Then, Bitcoin's use expanded into dark web marketplaces like Silk Road, largely due to its uncontrollable and pseudonymous nature, which also attracted individuals beyond that platform, including some people engaged in criminal activities. However, it's important to emphasize that it is the application of a tool, rather than the tool itself, that determines legality. The illegal use of Bitcoin does not inherently make someone a criminal; rather, it is the specific actions that can be classified as illegal. For instance, using Bitcoin to purchase certain drugs may be legal or illegal depending on the regulations governing the territory where the transaction occurs.

The year 2017 was marked by a significant speculative bubble in the cryptocurrency world, especially with the launch of thousands of Initial Coin Offerings (ICOs). However, many of these new cryptocurrencies had no concrete development or utility, and quickly disappeared. This 2017 bubble was followed by a strong correction in 2018-2019.

Then again in 2020, the market experienced another speculative bubble that drove the price of Bitcoin to $60,000. This bubble was different from the previous ones because of the broader diversification of investors, including financial institutions and large corporations. However, as with previous bubbles, significant corrections tend to follow once the initial euphoria fades.

Based on past cycles, it seems that the periodicity of Bitcoin's economic cycles is equivalent to the duration between two halvings, perhaps because the halving event acts as a trigger by cutting the emission of new bitcoins in half.

These significant fluctuations have earned Bitcoin a reputation as a highly volatile asset, often leading to substantial losses for its users. Although the price can drop by 10%, 20% or even 50% in a few days, it is important to understand that the Bitcoin protocol itself is not affected by price changes.

This significant volatility is fully accepted today by Bitcoin actors and can be mitigated by several solutions such as financial hedges (stablecoins), a strong long-term belief (hodling), or simply avoiding the risk of investing 100% of one’s funds in Bitcoin without a solid understanding. Understanding why the price of Bitcoin fluctuates so much is therefore essential to progress in this industry, as it is ultimately the price movements and cycles that help temper and regulate the market to some extent. However, it is fundamental to note that as Bitcoin grows and matures, volatility becomes less impactful.

Although the btc/dollar pair fluctuates in the short term, bitcoin, due to its limited quantity of 21 million bitcoins and its halving process (halving the monetary creation every 4 years on average), follows a general upward trend in a quasi-mechanical manner. Of course, like any financial asset, bitcoin is subject to economic cycles including periods of euphoria, speculative bubbles, and corrections. This phenomenon is quite common in emerging technologies, where the market is not always rational or efficient.

These cycles of speculative bubbles are quite unique in the world, as it is rare for a single asset to experience such a series of bubbles in succession. This phenomenon can be attributed to the fact that Bitcoin is not merely a bubble destined to burst. Rather, it functions as a currency that is actively used around the globe. The Bitcoin protocol stands out for its ability to operate on a global scale, 24/7, which poses significant challenges for financial authorities attempting to regulate it.

Today, Bitcoin continues to survive and grow even more by being integrated more and more into the traditional market, and the introduction of Bitcoin ETFs, clearer regulations, and improved tools for acquisition and storage are all contributing to this positive momentum. Bitcoin has ONCE AGAIN survived its speculative bubble, so maybe it's not just hot air after all!