History has shown that bear markets do not last forever. People who have been in crypto for a long time have seen the space evolve in cycles, alternating between periods of high activity and “crypto winters.”
Today we may find ourselves at the beginning of such a historic period that could be the start of another bullish market. If so, this bull run could be one of the most important in the history of crypto.
Against the backdrop of the growing participation of Indian investors, who are bringing in fresh perspectives and enthusiasm, the upcoming bull run appears to hold unparalleled promise.
While each bull run may have its unique catalysts and market dynamics, several common elements tend to support and characterize these periods. A crypto bull run is typically characterized by positive market sentiment, rising prices, increased trading activity, technical signals, institutional acceptance, macroeconomic factors and market cycle dynamics.
During these times, investor behavior is often influenced by FOMO (fear of missing out). While individual bull runs can vary in duration and intensity, these key factors collectively define and shape periods of bullish market activity in the crypto ecosystem.
Identifying patterns and signals
Recognizing distinct patterns and signals is key to identifying a potential move into a bull market. With a keen eye on two and a half bull cycles, certain events have emerged, sparking considerable optimism in the market in recent months. Of particular importance is the convergence of several major events within a short time frame.
The catalyst can be traced back to the recent approval of a Bitcoin exchange-traded fund (ETF) by Wall Street giant BlackRock. This is a watershed moment, symbolizing the entry of institutional and retail investors into the crypto market with unprecedented ease.
The projected inflow of billions of dollars into Bitcoin ETFs upon their initial trading is expected to exert significant upward pressure on prices, solidifying Bitcoin’s position as a legitimate asset class and laying the groundwork for increased demand.
Furthermore, Franklin Templeton, often considered “old-fashioned,” has filed for a mock Ethereum ETF, according to a filing with the US Securities and Exchange Commission. Previously, eight other entities had expressed interest in introducing similar products to the market.
A spot crypto ETF tracks the market price of the underlying digital asset, giving investors exposure to the token without the necessity of direct acquisition.
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Awaiting catalyst
The second signal that is eagerly anticipated is the upcoming Bitcoin halving, which is planned for around April. Historically, this event has catalyzed significant price appreciation in Bitcoin and other tokens.
The halving, which lowers the rate of new Bitcoin issuance, effectively reduces the supply entering the market. Combined with increasing demand, this scarcity has historically translated into exponential price increases. Previous halving events have seen Bitcoin’s price increase.
Bitcoin’s previous halving events provide compelling evidence of the potential impact on prices. The first halving took place in November 2012, causing a meteoric rise in Bitcoin’s price from around $12 to over $1,000 within a year – a staggering 83-fold increase.
The second halving, in July 2016, produced a similar phenomenon, with Bitcoin’s price rising from around $650 to a peak of around $20,000 within 18 months—a 30-fold increase.
The most recent halving, in May 2020, while producing a less immediate price impact, saw Bitcoin’s steady rise to new highs by the start of 2021, surpassing $60,000.
Anticipation among Indian investors
In India, crypto investing represents a relatively nascent frontier, with investors joining later than their Western counterparts. Yet the landscape is rapidly evolving, with a significant demographic shift in investor profiles across all types of investments.
For example, in online trading for the stock market, recent BSE data shows a striking increase in the number of accounts held by individuals aged 18-20 years. As of September 30, 2023, this figure stood at 16.1 million, a significant increase from 3.4 million in March 2021.
The proliferation of easy-to-use online investment platforms like Groww and Zerodha has helped a tech-savvy generation acclimate to online trading — a trend that bodes well for crypto adoption.
Similarly, crypto exchanges have addressed accessibility challenges for Indian investors with their user-friendly interfaces. Exchanges now offer a diverse range of investment products to suit different investor preferences.
Additionally, most Indian exchanges now comply with Financial Intelligence Unit (FIU) regulations, providing investors with an added layer of comfort and confidence.
Also read | CBDC: Has RBI’s monetary policy injected new life into the digital currency?
Look ahead
With these factors driving optimism for an impending bull run, one thing remains certain: the crypto revolution is still in its nascent stages, and the opportunities it presents are limitless. What excites me is the curiosity among investors to understand Bitcoin and other crypto-assets and the changing narrative surrounding these nascent assets.
Disclaimer for Uncirculars, with a Touch of Personality:
While we love diving into the exciting world of crypto here at Uncirculars, remember that this post, and all our content, is purely for your information and exploration. Think of it as your crypto compass, pointing you in the right direction to do your own research and make informed decisions.
No legal, tax, investment, or financial advice should be inferred from these pixels. We’re not fortune tellers or stockbrokers, just passionate crypto enthusiasts sharing our knowledge.
And just like that rollercoaster ride in your favorite DeFi protocol, past performance isn’t a guarantee of future thrills. The value of crypto assets can be as unpredictable as a moon landing, so buckle up and do your due diligence before taking the plunge.
Ultimately, any crypto adventure you embark on is yours alone. We’re just happy to be your crypto companion, cheering you on from the sidelines (and maybe sharing some snacks along the way). So research, explore, and remember, with a little knowledge and a lot of curiosity, you can navigate the crypto cosmos like a pro!
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