When Will the Next Full-Scale Bull Run Begin?
In 2023, we’ve seen Bitcoin make an impressive leap from $16,500 to $30,000, along with several altcoins that have achieved exponential growth. However, it’s difficult to label this as a full-fledged bull run. Instead, it mirrors more of a transitional market stage, reminiscent of the one we witnessed in 2019. So, when should we expect the genuine bull market to commence?
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First and foremost, it's crucial to highlight that we could still be in for a significant downturn in the cryptocurrency market. This downturn could be linked to a potential recession in the United States or the surfacing of other unforeseeable negative events. For the time being, we can only review possible factors that might precipitate or signal the advent of a full-scale bull market.
Bitcoin Cycles ?
One aspect that virtually every crypto influencer pays heed to are Bitcoin's four-year cycles. These cycles are connected to the reduction of Bitcoin's emission, a process that takes place every four years. Known as “halving,” this process results in miners receiving half the reward for each mined block.
Looking back at Bitcoin's past cycles, it's evident that a comprehensive bull market typically kicked off a few months before each halving. The subsequent halving event is projected to occur in or around April 2024.
Bitcoin Cycles Source: Trading View
Legalization and Favorable Regulation ⚖️
In light of the burgeoning crypto industry and a recent surge in market adversities, governments globally have grasped the need to adopt (legalize) and regulate cryptocurrency.
While this idea may not be popular with everyone, it holds the potential to draw a substantial number of institutional investors into the industry, thereby infusing the crypto market with enormous capital. It's important to remember that major players are inclined to operate in markets where their investments are protected by law.
Moreover, all eyes are currently on the US Securities and Exchange Commission (SEC) as they deliberate over an application from investment behemoth BlackRock to launch a spot Bitcoin ETF. Our dedicated article delves into why this could catalyze significant growth.
Narratives and Cutting-edge Technologies ?
Each bull run typically carries a compelling narrative that convinces investors to invest their funds. The ICO boom arguably powered the cryptocurrency market in 2016-2017, while decentralized finance, launchpads, and NFTs were the driving forces in 2020-2021.
What will be the catalyst this time around? That remains to be seen. However, some are positing that the integration of Artificial Intelligence (AI) within blockchain technologies, or vice versa, could be the impetus for the next bull run. For now, AI remains a full-fledged trend primarily outside the realm of the crypto industry.
Reduction in the Interest Rate ?
The initiation of interest rate reductions in the US could boost liquidity not just in the stock market, but also in the realm of cryptocurrencies, as it suggests an influx of extra funds into the system. This was also a key instigator for the bull market of 2020-2021.
Throughout most of 2022 and into the beginning of 2023, we've watched as the US Federal Reserve ramped up the interest rates in an attempt to suppress inflation. This action, unfortunately, also had an adverse effect on cryptocurrencies. Currently, we are on the cusp of a full halt in interest rate hikes, and as we move into 2024, we might even witness a decrease.
US Interest Rate Chart Source: investing.com
Ukraine's Triumph in War ?
The global economy, which directly influences the cryptocurrency market, took a major hit from Russia's all-out military assault on Ukraine – a critical factor with far-reaching implications. This sent shockwaves around the globe, given Ukraine's significant role in the world economy.
Russian defeat would prove beneficial for everyone: the world could then refocus peacefully on economic growth post-war. Ukraine, demonstrating its resilience as a nation with vast potential, has drawn the attention of international investors eager to capitalize on this potential.
Furthermore, Ukraine might just emerge as a new global hub for cryptocurrencies, as the government is currently engaged in legalizing and regulating cryptocurrency. This development is set against a backdrop of the United States imposing ferocious regulation on the crypto industry. If a sanctuary for cryptocurrency investors comes into being, the cryptocurrency market could experience a resurgence.
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