Bitcoin 'supercycle' - longer & stronger?

[MrSpasybo 1049]

In a Twitter exchange on Feb. 12, the popular analyst joined Dan Held, growth lead at U.S. exchange Kraken, calling the current BTC market a bull run like no other.

Held had previously explained his theory about the state of Bitcoin in 2021 — that price gains cannot be compared to past bull phases, and do not even match the end of 2017 when BTC/USD neared $20,000.

Article: Bitcoin 'supercycle' may emerge in 2021 as Fed balance sheet hits new record high

I reread the article on February 12, 2021 after Bitcoin's price surpassed $50K. And I think we have grounds to believe in the Bitcoin supercycle, for a larger period of time, with BTC price consistently being maintained at a high level:
+ Halving 2020 reduces the block reward of BTC to 6.25 BTC/block, that is, compared to before, 6.25 * 24 * 6 = 900 BTC less per day. The scarcity has really become apparent after 6 months. The 2024 Halving will cause the new number of BTC to drop by 450 BTC/day, the change in scarcity is likely to be no longer large. So the 2020 Halving could be the last Halving to cause a massive bullrun;
+ The mature of crypto market: the driving force for the market comes from major financial institutions in the traditional economy with long-term investment objectives;
+ The concept of Bitcoin is simplified: "Bitcoin - Digital Gold", helping people to access Bitcoin more;
+ After many years, the governments did not ban Bitcoin, they just planned to enact the legal framework for Bitcoin.

I really expect this bullrun to last until the end of 2021, and then just a minor correction instead of the crypto winter. Do you think my expectations are too optimistic? And do you think crypto winter is essential for the crypto market?

[yonkii 3205]

We don't know when the cycle will end. I read a lot about the previous two bull runs in 2013 and 2017 and I see the similarities between all. In any case, it is now in a state of fomo but it may have some more to rise before crypto winter appears. From what I have seen it could happen any day, it may take months more but the end of the bull run will happen and it will be fierce and make many people lose all their money with a huge crash, which will be around 80% from the top, as it was in both 2013 and 2017. I would say that it can last until the end of this year and price can keep rising, perhaps until a moment where macroeconomic events change and reduce the appeal of high risk investments to institutions. 

 

Pay attention to government bond yields. It is very important to remember that they went negative during the spring of 2020 and this event led funds to invest in high risk investments, pump stocks, and buy crypto. A rise of bond yields will happen and it could change the course of the crypto market acceptance.

 

A secondary macro indicator according to my research could be the value of USD to EUR. If USD start rising it could bring Bitcoin price down and may mean the beginning of a long bear market is closer.

Edited February 19, 2021 by yonkii

[MrSpasybo 1049]

On 2/19/2021 at 11:12 AM, yonkii said:

We don't know when the cycle will end. I read a lot about the previous two bull runs in 2013 and 2017 and I see the similarities between all. In any case, it is now in a state of fomo but it may have some more to rise before crypto winter appears. From what I have seen it could happen any day, it may take months more but the end of the bull run will happen and it will be fierce and make many people lose all their money with a huge crash, which will be around 80% from the top, as it was in both 2013 and 2017. I would say that it can last until the end of this year and price can keep rising, perhaps until a moment where macroeconomic events change and reduce the appeal of high risk investments to institutions. 

 

Pay attention to government bond yields. It is very important to remember that they went negative during the spring of 2020 and this event led funds to invest in high risk investments, pump stocks, and buy crypto. A rise of bond yields will happen and it could change the course of the crypto market acceptance.

 

A secondary macro indicator according to my research could be the value of USD to EUR. If USD start rising it could bring Bitcoin price down and may mean the beginning of a long bear market is closer.

In my opinion, the increase in the price of government bonds is only temporary, in the near future, Americans will receive more money to support the epidemic and market will have a huge amount of money. This lowers the USD price and the participation of companies that are buying BTC will give people more momentum to invest in crypto than before. MicroStrategy's Saylor is continuing to support and promote BTC, the participation of large institutions will help limit BTC price volatility and reduce the severity of the next crypto winter.

[kryptonick 2659]

On 2/18/2021 at 1:42 PM, MrSpasybo said:

I really expect this bullrun to last until the end of 2021, and then just a minor correction instead of the crypto winter. Do you think my expectations are too optimistic? And do you think crypto winter is essential for the crypto market?

You should consider a few facts that are very important. The halving happens three to four months earlier each time. In 2014 the bull run officially ended in February with the news from MtGox having lost 850,000 BTC. But the signs of a top were earlier and the price above $1000 couldn't have sustained for longer as the market was turned into a casino (words of Michael Saylor in 2013).

In 2018 the bull market ended in December for Bitcoin, but officially it was start of January. The halving happened in July while in 2020 the halving took place in May (3 months earlier). For these reasons I place the end of this bull cycle at June/July and no further for 2021.

So, this time is no different, it will be the same and we can safely start talking about a two year bear market, if we care about each other. Personally, I don't want anyone to lose money by buying the top for Bitcoin or any other asset.

In the altcoin market, this time instead of LTC, XRP, IOTA, and all other 2017 pumped coins, we have DOT, Link and more of these. They had their year and soon they will be over with.

Cardano is one that managed to push itself so high just because of marketing and nothing else. Development in Cardano is basically ridiculous having progressed by just 1% since 2017. I won't go on with more altcoins as I will waste the readers time. All of them will drop 95% at least from the price they have today.

If there is a reason I wrote all this, it is not because I sold and wait for three years to buy again. It is because this happened before and will happen again. Until the top is in, maybe all coins will double and rise more, this is what I don't know exactly how high they can go, but I know they will go down again at the rate explained above. It is good time to trade but not to invest.

Edited March 1, 2021 by kryptonick