The bull run of the cryptocurrency market may be closer than it looks. When do experts expect Bitcoin to rise?
The end of the current “crypto-zima” is not long away, according to Dan Morehead, CEO of crypto fund Pantera Capital. In a recent interview, he said that a global bull trend in the crypto market is closer than it looks, and that Bitcoin’s value will supposedly start rising in the foreseeable future. The bottom for the cryptocurrency may have been formed in June this year, when its price first fell below the $20,000 line. Here’s a closer look at what’s going on.
Over the past 24 hours, the cryptocurrency market has shown serious growth. In particular, Bitcoin rose in price by more than ten percent. And the situation as of this evening is as follows.
Changes in cryptocurrency rates over the past 24 hours
When will Bitcoin start to rise?
According to Morehead, the price dynamics of the major cryptocurrency are now little different from previous market cycles. Previously, every global fall in Bitcoin ended with the formation of a bottom, a long period of low volatility and a jump to a new all-time high. There is every reason to believe that the trend has not changed, the expert believes. Here is his rejoinder.
We have gone through three major bear market cycles. I think we bottomed in June and are now on the way to the next bull run. There will be a lot of headwinds and it might take some time to rise, but the market is really getting ready for a new rally.
Note that some analysts consider the collapse of the coin market in June not the bottom of the bear market, but its full-fledged beginning. In mid-summer, such conclusions were shared by Grayscale Investment, which is betting on the duration of the cryptocurrency winter of 250 days. As such, a full-blown bull run could begin in the spring of 2023. Read more about the experts' views in a separate piece.
Pantera Capital CEO Dan Morehead
According to CryptoPotato sources, the expert has even given his prediction on the price growth. In his opinion, Bitcoin will rise in price by about 2.5 times every year, that is, we are talking about an average value. Moreover, the market transformation did take place in the sense that investors now have a choice of reliable investments not only from Bitcoin or Etherium. Dan continues.
Bitcoin is no longer absolutely everything to the industry. There was a time when it held 100 per cent of market capitalisation. BTC and ETH used to really show up in the lion’s share of trades. Now there are many other really important projects. As the major cryptocurrency grows, they show notable returns and can often outperform both Bitcoin and Etherium.
More likely, Morehead is alluding to popular projects like Solana, Avalanche and Near, which performed well during the bull run in 2021. These projects have new technologies behind them, and their ecosystems are evolving even now. Therefore, these industry players can already be considered serious players.
Bitcoin exchange rate over time
Meanwhile, Brian Armstrong, CEO of Coinbase, the largest US cryptocurrency exchange, said earlier that there could be at least another 12 months of a bearish trend ahead. According to him, the start of the bull run can only be talked about by the end of 2023.
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One of the cryptocurrency’s critics, Peter Schiff, “knows exactly everything” about the reasons behind Bitcoin’s falling price. The renowned economist posted a statement on his Twitter page stating that altcoins played a crucial role in the collapse of the major cryptocurrency.
Not only is Bitcoin falling, its share of market capitalisation has fallen to 38.1 per cent, the lowest since June 2018. Competition with nearly 21,000 other inherently worthless digital tokens and NFTs is taking its toll. Even if Bitcoin is scarce, its alternatives are clearly not.
Share of most popular cryptocurrencies in market capitalisation over time
Schiff's argument is barely true. If he was right, then we would see a significant increase in the value of many altcoins, but so far this trend is not so pronounced. Well, BTC's share of the total market capitalization has actually decreased a bit recently, due to a rise in the price of Etherium amid expectations to upgrade the coin to the new Proof-of-Stake consensus algorithm.
Perhaps cryptocurrency investors will indeed act more cautiously in the coming months. The cryptocurrency market is gradually evolving and reaching maturity, but investment in the industry will continue to decline until the end of 2022, according to consultancy KPMG.
The analysts noted that the amount of global investments in crypto projects in the first six months of 2022 was $14.2 billion from 725 transactions. By comparison, $32.1 billion was invested in the industry in the same period in 2021. Much of the negative trend was triggered by the poor macroeconomic environment.
How to invest in cryptocurrency
According to CryptoSlate, the record collapse of the crypto market happened due to geopolitical instability in Europe, rising inflation and the collapse of the Terra project ecosystem. This has also negatively impacted crypto as an attractive asset class for investment. However, analysts do not expect any major shocks in the second half of 2022. Here’s their view.
Until 2018, most crypto investment came from retail consumers. Since then, the investor profile has changed. Institutional and corporate investors account for a much larger share of investments.
Investing in the crypto market from 2019
Experts also highlighted that cryptocurrencies are currently still markedly correlated with traditional assets. That is, negative or positive news in the macro economy will clearly be reflected in crypto, it can even be considered an indicator for the rise and fall of other markets.
For example, yesterday BTC fell 5.9 per cent of its value, while the Nasdaq, S&P 500 and DOW indices all declined in the same period, albeit at a much smaller pace. That said, cryptocurrencies have rebounded in price in earnest over the past 24 hours.
Bitcoin exchange rate
Read also: Cryptocurrency enthusiast collected $100,000 from subscribers to teach them a lesson. But why?
Not only is the inflow of large investments declining, but also the number of unique buyers of NFT tokens from the most popular Bored Ape Yacht Club (BAYC) series. This figure fell to a low in August, with just 263 unique token purchases in 31 days with 438 transactions.
BAYC token trading activity
The average transaction size of BAYC tokens has also fallen, dropping almost threefold to $106,456 from April to August. In May 2021, trading activity in BAYC reached its historical peak – then the number of active buyers per month reached the mark of 3,550 people, and more than 9,000 transactions were made with the collection.
The decline in the popularity of NFT tokens is legitimately influenced by “cryptozyme”. The BAYC community has also had scandals recently. For example, the creators of the collection were caught promoting Nazism, and the community’s Discord server was subjected to a phishing attack.
We believe it is impossible to guess the exact timing of the cryptocurrency market's transition to a bullish trend - especially months or years in advance. However, the situation in the coin niche will definitely improve as inflation declines and the Fed softens its policy, which will probably stop raising the benchmark interest rate over time. So investors are left to wait and watch the economy.
Let’s hope the bull run for Bitcoin really isn’t as far away as it seems. Watch for other news in our millionaires cryptochat. We discuss other important developments there as well.
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