We need to talk about the next bull run for crypto. This might be the last bull run, as we are seeing significant industry adoption and the move for ETFs to enter the space. Once that happens there will be significantly less volatility in the market and the chance for exponential gains will decrease for each subsequent bull run.
Each bull run has trends that dominate the market and new hype darlings that emerge. We’re going to discuss them all as I see them, as well as the broader timing for the market move and potential triggers that may accelerate this.
Table of Contents
The Next Bull Run
Degen Activities
STX
AVAX
SUI
Polygon (MATIC)
ETF Update
RWA’s and the next narrative
Current Price Action
Conclusion
Internal References
1. The Next Bull Run
(Apologies for the old charts, this section was written back in July. It’s still relevant so I’m leaving it mostly untouched even though the charts are now old).
We can’t discuss a bull run without discussing price, so we’re going to start with the same BTC chart that most of you are used to seeing updated behind the paywall.
Last year, we watched Bitcoin and the broader asset markets get beaten down by negative black-swan events. These were things like the collapse of LUNA, Celsius, FTX, etc. Most every major surprise event that happened last year was negative, and this was occurring alongside the headwinds of rising interest rates that we anticipated further forcing the macro down until we reached the secular market bottom in Nov. of last year when we hit the US debt ceiling.
This year has been the exact opposite. Despite still dealing with high lending rates, every major unforeseen event has been in our favor, from the regional banking failures earlier this year to the announcement of Blackrock’s Bitcoin ETF. And since then there have been major players buying up the Bitcoin mining sector with it outperforming Bitcoin as Vanguard put in a naked buy order this year to get to half a billion dollars of exposure.
Right now significant institutions across the board have been pushing to get major exposure to bitcoin and I’m going to share how I know that with one simple chart below. The chart I’m about to share is for Bitcoin Cash (BCH), a long time ago (2017) bitcoin forked into two separate chains. BCH only pumps for a few events, one of those events is when naive retail is pumping volume on exchanges that cater to them (Robinhood), and the other is when naive institutional players are told to grab exposure to bitcoin but aren’t totally sure which one to buy.
You can see that the chart has been almost non-reactive to other events all the way back to December. It basically trades with next to no volume most of the time because very few genuine users are actually on that chain. But it pumped when BlackRock announced their ETF. Not only did it pump, it pumped 300% in a week. For reference, the last time BCH pumped was precisely 7 days before LUNA collapsed near the end of the last hype cycle as retail was being shuffled into the markets to be exit liquidity for those that were already in it. It’s mostly a dead token except when large numbers of naive retail are being pushed into the market, or when large institutional entities that are naive to the markets are being pushed in.
Right now we have the latter occurring. Meaning that we have a lot of institutional investors beginning to push us from behind. They’re helping us to do what Peter Schiff likes to call “climbing a wall of worry.” This is the kind of behavior we see right at the end of a bear market as a bull cycle is about to begin.
We’ve talked about typical market price structure before, but if you need a refresher, this is the order in which capital typically flows when it comes to crypto.
Cash > BTC > ETH > ALT-coins
New capital typically flows to Bitcoin first. From an institutional perspective, it’s the oldest, and most known commodity in this space and new capital typically flows here first. On top of that, those who are already in this space will have stablecoin allocations that they will be redirecting back into crypto near the start of the cycle and they likely know to rotate into Bitcoin first. ETH has established itself as the de-facto smart contract protocol for blockchain and its 2.0 updates have created deflationary tokenomics that make it the clearest value buy for institutional investors that are a little bit more savvy. It’s quite possible that during this rotation more capital might rotate to ETH earlier than it normally does. Finally, once Bitcoin and ETH are at highs it becomes very easy for users to peel off what may have been a small amount of BTC or ETH at the start of the cycle to speculate on Alt-coins. When ETH had run from $80 to $4,500 last cycle, quite a few people were willing to peel 1 ETH off to speculate on several different dog-themed coins. With that much value appreciation to a token, it’s very easy to speculate and feel like you’re still way up from where you started (you are), which is why Alt-coins typically rip at the end of a cycle.
Keep this in mind as you allocate capital throughout this cycle. Most people who are new to crypto and in the grips of the start of a bull cycle will try to shortcut their way to the top by over-allocating to an Alt-coin and hoping for a 1,000x so they can “catch-up” and rotate back into BTC or ETH. People feel like they are behind and let their emotions trick them into holding an Alt-coin through an entire bull run while watching the primary tokens do a 20x. For reference, I’ve already stated my buy-in price for ETH last cycle, I was late, and I’m still up 10x as we speak today, right now. All of my alt-coins are either at 50%, break even, or if I’m lucky at 3x. If I had tried to allocate more to Alt’s last cycle, I would be poorer today, and the same thing is true for this next cycle. I’d even say it’s more important to have an allocation to ETH than it is to BTC, but still, just make sure you aren’t overly allocated to Alt-coins as the cycle heats up.
Lastly, for the time frame of the next bull market, it feels like narratively we’ll have central banks rotate towards some dovishness near the end of the year and the bitcoin halving is coming in April 2024. On top of that, we’ll likely see institutional investors continuing to rotate into this space. I think we begin acknowledging the next bull cycle around Q1 of 2024, but we’ll see. If you remember 2020, infinite money was dumped onto the markets in March 2020, yet Bitcoin didn’t go on its run until December of that year. This next cycle may similarly take several months to get going beyond the secular bottom.
That being said, we’re going to talk about some Alt-coins very soon here.
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