- September 22, 2023
- Posted by: [email protected]
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In the world of cryptocurrency, opinions are divided on when the next bull market will ignite. Experts agree, however, that the next crypto bull run will be fundamentally different from its predecessor. Investors need to reduce their expectations of an imminent price rocket in the crypto market. These sentiments were expressed by Lars Seier Christensen, the founder of Concordium, a blockchain enterprise, in a recent interview.
While the crypto market eagerly anticipates the approval of spot Bitcoin exchange-traded funds (ETFs), Christensen remains skeptical about their immediate impact on crypto markets. He cautioned against assuming that a Bitcoin rally would automatically lead to a surge in all cryptocurrencies, including older altcoins like Ethereum. He argued that corporate interest in blockchain technology is steadfast, despite the recent lull in digital asset prices.
Christensen’s perspective suggests that the next phase of crypto growth won’t be a flashy and exhilarating rally like the one witnessed in 2021. Instead, it will be characterized by gradual, subdued growth over the next 18 months. He emphasized that corporate entities primarily require cryptocurrencies to facilitate their activities on blockchain networks, making them less dependent on significant increases in crypto values.
However, not everyone shares Christensen’s outlook. Ben Simpson, the founder of Collective Shift, a crypto education platform, believes that various data and indicators indicate the early stages of a Bitcoin bull market. Factors like the drawdown from the all-time high and market-value-to-realized-value ratios suggest that we might be in the accumulation phase, often a precursor to a bull market. Simpson believes that Bitcoin, Ethereum, application-specific tokens, and sectors such as gaming are poised for significant growth in the next bull market.
The past two years have been challenging for the crypto industry, marked by regulatory scrutiny and high-profile collapses. Despite these setbacks, the recent decision by the United States Federal Reserve to pause interest rate hikes has injected optimism into the macroeconomic landscape. As central banks globally reduce rates and inflation eases, investors are expected to embrace more risk, including crypto investments.
Market analysts like Josh Gilbert from eToro Markets believe that 2024 holds promise for a crypto rally, primarily driven by the Bitcoin halving event. Tina Teng, a market analyst at CMC Markets, urges caution and suggests that it’s too early to declare the start of a crypto bull market. She emphasizes that the timing depends on the macroeconomic environment and whether central banks are willing to halt rate hikes to inject liquidity into the markets.
Teng points out that past crypto booms have typically occurred during the Fed’s rate-cut cycles, not during rate-hiking phases. She also highlights concerns about government bond yields and inverted bond yield curves, which often signal economic uncertainty.
For the thesis of an imminent bull market to be validated, Bitcoin would need to break through the 50-day moving average and embark on a sustained upward trajectory, according to Teng.
The crypto landscape is evolving, and expectations of future bull runs should be tempered. While some experts anticipate a resurgence in the near future, others advise caution due to the complex interplay of economic factors. The days of explosive, “sexy” rallies may be behind us, replaced by a more gradual and steady growth in the crypto market.
