The next crypto bull market will look very different than the last one, and investors should temper their expectations of a rise in cryptocurrency prices any time soon.
At least that’s what Lars Seier Christensen, founder of the enterprise blockchain Concordium, said in a recent interview with Cointelegraph.
As the majority of the crypto market views the multitude of proposed spot Bitcoin (BTC) exchange-traded funds with optimism, Christensen doubts that their approval will immediately be a significant driver for the crypto markets.
“Even if there is a Bitcoin rally, I don’t think you should naturally assume that everything will recover with it.”
“Does this necessarily mean that Ethereum and many of the older altcoins will also rally as a result? I think that almost certainly won’t happen,” he added.
NEXT DATES TO WATCH:
Mid-October is the next big day to watch. Namely on October 16th. (& @GlobalXETFs’ Oct. 7)
Also keep in mind that we certainly expected delays with this round of #Bitcoin ETF submissions. It would have been a shock if they had been approved this week. pic.twitter.com/i14fg8FWun
— James Seyffart (@JSeyff) August 31, 2023
Christensen said that while digital asset prices have fallen over the past 18 months, corporate interest in blockchain technology remains undiminished.
This means that the next big step for the industry will not be characterized by a particularly “sexy” rally that sees crypto asset prices skyrocket like in 2021, but rather by more muted growth that will take place in the will take place gradually over the next 18 months, noting:
“The only reason companies need a crypto asset is to perform what they want to do on a specific blockchain. So I think it’s very clear that people need to be clear that they are not in dire need of any particular cryptocurrency increasing significantly in value.”
However, not everyone would be inclined to agree with Christensen.
Ben Simpson, founder of crypto education platform Collective Shift, said there is a wealth of data and indicators that suggest we are already experiencing the early stages of a Bitcoin bull market.
“The decline from the all-time high chart and the ratio of market value to realized value suggest that we are in the final stages of accumulation, often a harbinger of a bull market,” Simpson explained.
When it comes to the assets best poised for a big boom, Simpson believes the next bull market will bring wind to the sails of Bitcoin, Ether (ETH), and application-specific tokens, as well as sectors like gaming.
“DeFi tokens are risky but offer significant upside potential, and I believe Bitcoin will become the ‘silent winner’ given wider adoption and one that I am most bullish on.”
“A Bitcoin ETF will have no impact on price” pic.twitter.com/ArSTwskEec
— Ben Simpson (@bensimpsonau) September 13
The last two years have been tough for the crypto industry. An increasingly restrictive Federal Reserve and a series of high-profile collapses, including FTX and Celsius Network, have caused investment in the industry to decline and with it prices for crypto assets to fall.
After the Federal Reserve decided to pause interest rate hikes earlier this week, eToro Markets analyst Josh Gilbert is optimistic about the broader macroeconomic outlook.
Breaking News: The Federal Reserve just paused its interest rate hikes and will keep interest rates at current levels pic.twitter.com/meRkOhhWfh
– GURGAVIN (@gurgavin) September 20, 2023
“We finally have an improving macroeconomic environment with interest rate cuts from central banks worldwide. “As interest rates begin to fall and inflation eases, investors will take more risk and invest more capital in financial markets – and cryptocurrencies will take center stage,” he said.
Like many market commentators in recent months, Gilbert claimed that next year was primed for a rally.
“2024 could be a strong year for Bitcoin and the broader crypto market. The Bitcoin halving is at the heart of this theory and the key catalyst that bullish investors are focusing on.”
However, Tina Teng, market analyst at CMC Markets, explained that it is far too early to worry about whether massive gains are on the horizon or not. Instead, investors should prepare for a new wave of uncertainty.
Related: China is suffering its worst capital flight in years, but could it boost Bitcoin?
“It is still too early to say that it is the beginning of a bull market in crypto. “This would depend on the macroeconomic environment and whether central banks are willing to end their rate hike cycles to provide enough liquidity to markets,” Teng said, adding:
“The more restrictive monetary policy is the reason for the decline in riskier asset classes such as startups, small caps and cryptocurrencies. Historically, cryptocurrency market booms have occurred during Fed rate cutting cycles, but not during rate hike cycles.”
She continued:
“Soaring government bond yields and inverted bond yields continue to provide warning signs of the economic uncertainty ahead.”
#Bitcoin is racing towards a realized loss at the 50-day moving average of the RPV ratio.
And if previous cycles tell us anything, this is the last time it will happen until the peak of the next cycle!
Every cycle, Bitcoin makes a… pic.twitter.com/Rrw7wYKbvA
— CryptoCon (@CryptoCon_) September 1, 2023
Teng said that Bitcoin needs to break the 50-day moving average and see another move higher to confirm the thesis of an impending bull market.
Magazine: How to Protect Your Crypto in a Volatile Market – Bitcoin OGs and Experts Speak Out
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