It is the question that almost every cryptocurrency investor considers – when is the next crypto bull run? Given crypto’s penchant for cycles, many believe it is possible to plot and predict bull runs.
But is this really the case?
As many of you may know, the last crypto bull run peaked in November 2021. That’s when the cryptocurrency market cap reached a total value of just under $3 trillion. After that point, we witnessed a steady price decline that led to a condensed market of $800 billion. Understandably then, many people were anxious to see prices rise again. It left them looking for signs of the next crypto bull run.
Bitcoin Halving
Historically speaking, Bitcoin’s price action has always led the rest of the market. With a market dominance of around 40%, it is easy to see why. The regularity of the Bitcoin halving event typically drives the price of BTC and, therefore, dictates the activity of the rest of the market. Of course, other factors come into consideration, like macroeconomics, the price of energy, and global conflict. So far, it seems that the impact of the Bitcoin halving cycle has a significant impact on market prices.
When we look at the previous two halvings, in 2020 and 2016, respectively, it is clear that, due to supply constraints, the price of BTC increased in the following 13 to 18 months. The chart below shows this in some detail:
The next Bitcoin halving is due in March 2024. Many believe the late November value of Bitcoin may be the lowest of this particular cycle and with the pre-halving rallies experienced in the past, we could expect to see some positive price action soon.
This is all very well, but we know that the price of crypto, particularly Bitcoin, is volatile, to say the least. Are other indicators suggesting Bitcoin and crypto will follow the same path?
Big Money
As one of the largest names in the investment business, famed American cryptocurrency hedge fund Pantera Capital is responsible for some $5.6 billion in assets under management. Founded in 2013 and holding the title of the world’s largest crypto hedge fund, when Pantera talks, people tend to take notice.
And so when Pantera released details regarding a planned $1.25 billion investment round in leading cryptocurrencies, including BTC, it was the kind of confident move that helped to reassure people during these difficult times.
Pantera CEO Dan Morehead said the company wants to give liquidity to those that are “kind of giving up” because it remains “bullish” for the next 10 or 20 years.
He made further confident calls at Token2049 in Singapore. Morehead highlighted the enormous potential of Web3, NFTs, and DeFi as part of an opening speech at the annual event. Drawing comparisons to the early days of the internet with companies such as Apple, Amazon, and Google, Morehead explained that there was still time to make big money in crypto.
Crypto Bull Run Predictability
No one knows what the future holds. But we can mitigate our appetite for risk by studying historical performance. If, and only if, Bitcoin and the rest of crypto follow the trends set in recent years, we may be looking at another crypto bull run somewhere between the early part of 2023 and Q3 2025.
However, as I mentioned above, this does not take into account macroeconomics and other weight-bearing factors. However, who is to say that by the end of 2023, the world will not be a far more stable and predictable place? It’s a stretch, but that is precisely the environment favoured by investors.
