Analyzing the Four Stages of a Bull Market: We Are Entering the Euphoria Phase
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Analyzing the Four Stages of a Bull Market: We Are Entering the Euphoria Phase
For those who are fully committed and focused, 2025 could become a life-changing pivotal year.
Navigating Web3 tides with focused insightsAuthor: Yano, Co-Founder of Blockworks
Translation: TechFlow
A bull market has four phases.
Buckle up—we’ve just entered the most interesting phase.
Welcome to Phase Three.
First, a reminder: Phase One is Rebirth
This phase occurred from January 2023 to January 2024.
In the Rebirth phase, exhaustion from the bear market dominates.
Indifference drains the appeal from every narrative.
Your friends and the media are still focused on bear market collapses.
Job cuts continue.
Yet prices quietly rise.
Bitcoin tripled.
But you barely noticed—because you’re still underwater on many investments.
Only seasoned crypto investors who’ve lived through two or more cycles realize the bull market has begun.
Most people still don’t believe this is the start of a bull run.
Phase Two is Excitement
This phase began in February 2024 and ended last week.
Some assets approach all-time highs. Market narratives return—but only a few per quarter.
Everyone in crypto now knows we’re in a bull market.
Yet strangely, your friends still aren’t messaging you.
You’re in a peculiar state of excitement mixed with anxiety.
Mass layoffs have mostly stopped, but hiring hasn’t restarted yet.
The space feels closed off. No one is leaving, and no new people are joining.
Overall, life is good. Your crypto friends are all making profits.
This is the calm before the storm.
Phase Three is Euphoria
We’re in this phase right now.
The Euphoria phase officially began on November 5 with the U.S. presidential election.
This is a delightful moment.
Everyone is making money—but speculators haven’t flooded in yet.
Seize the moment and enjoy it, because it will be brief.
The assets you hold are about to surpass their all-time highs (if they haven't already).
Where once only a few new market narratives emerged each quarter, now there’s a new one every week.
Towards the end, it’ll feel like a new story emerges daily.
No one grows tired of these stories—every idea is seen as “good.”
Anyone with a following is treated as a genius, offering opinions on the latest market trends.
Somewhere, someone will make money on this week’s hot token—and I guarantee they’ll brag about it.
That can be frustrating.
(But remember: everyone has skin in the game, and no one shares their losses.)
New narratives bring new tokens.
Tokens will surge daily. You won’t own most of them.
You might earn 8% that week, yet still feel regret for missing out on [the hot new token].
The combination of new tokens and new stories fuels FOMO—fear of missing out.
If you’re not careful, FOMO will get you into trouble.
Some advice:
Understand your strategy and its trade-offs.
Day trading? Know it impacts your work and mental health.
Focused on building? Accept that you may miss big trades.
Everything has pros and cons—understand them.
Don’t try to do everything—you’ll succeed at nothing.
Back to Phase Three.
The private markets are about to heat up dramatically.
It starts with asset allocators. On November 6, they woke up realizing they were severely underweight in crypto.
They begin reaching out to venture capital firms and hedge funds for allocations.
These firms will announce massive new funds faster than you’d expect.
Late-stage venture capital has been silent for over two years. Now it’s roaring back.
Large funds and an open IPO market mean B-to-D round companies can raise again.
Mega-sized funding rounds become normal once more.
A-round deals close rapidly.
This draws world-class founders back into the space.
Hiring becomes fiercely competitive.
Protocols offer generous token incentives to top talent.
If you're a founder, you have 3–6 months (maybe less) to hire the best people at reasonable salaries.
After that, you'll be playing catch-up.
We’re mainstream again.
Forbes, Bloomberg, CNBC—they’re all bullish on crypto.
Your friend messages you about Cardano. Your financial advisor suggests allocating 5% to Bitcoin.
Traditional finance races to “tokenize everything.”
Then, around mid-2025, strange things start happening.
Entering Phase Four: Delusion
Fortune 500 companies announce massive Bitcoin purchases.
Athletes and artists jump in—crypto permeates culture.
VCs stop doing due diligence.
Speculators raise millions and become celebrities.
Random tokens surge 10x in a week.
In Phase Four, everyone believes the market will rise forever.
Delusion drives decisions.
This phase could also be described as mania.
Nothing makes sense anymore.
Previously, there was a new market narrative every week.
Now, everything becomes a narrative.
Your wealth exceeds anything you ever imagined.
Your high school friend launches a token and becomes a multimillionaire overnight.
A veteran investor buys a sports team.
Bieber launches a decentralized social platform.
LeBron launches a meme coin.
Corporations spend billions on marketing—brace yourself.
The next 12 months will be wild. For those fully committed, 2025 could be a life-changing year.
But if you’re not careful, arrogance and laziness during Phase Four could cost you dearly.
Finally, don’t forget to enjoy life from time to time.
Now, let’s get building.
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