Bull Run 2.0: This Time It’s Different
Current price action is eerily similar to that of 2017, leading most people to believe that a similar boom and bust cycle is underway. In a news digest, Micky has highlighted key factors that set the coming market cycle apart from the last one, June 25, 2019.
Dynamic of Fundamentals
The speed with which the cryptocurrency market has developed and further innovated has been remarkable over the course of the last one and a half years. When Bitcoin surged in 2017, a large proportion of the pump was accrued to new investors who never heard of Bitcoin FOMO-ing after the media blitz around the 10-20 percent daily movements.
This time around, Bitcoin has been healthily moving upwards, with sustained price momentum setting itself in as the norm. Last time around, taxi drivers and store clerks were giving people advice about which altcoins to invest in; this time we have a lot more skepticism and rational thinking, though the same euphoria cannot be ruled out considering the current bull cycle is just starting.
A few interesting changes from 2017 till today solidify the viewpoint that Bitcoin is a changed market. For instance, Google searches for “buy Bitcoin” are down 90 percent from their ATH in 2017, which shows this surge is less about FOMO. Only five percent of market volume is considered legitimate, which turns out to be a positive as it increases the significance of the futures market and, by causation, institutional investors.
Taking on the institutional angle, the introduction of Libra, the launch of Visa’s distributed cross border payment network, and the growth in Coinbase Custody draw a very vivid picture as to how institutions are viewing this market. Chinese investors are using crypto to circumvent capital mobility restrictions and the panic caused by the Indian government’s ban threats have led to a premium for crypto in the country.
A Hint of Pessimism
Most analysts that were bearish even at $3000-4000 have changed perspective and started to accept the occurrence of a bullish cycle. There are still a handful of those like Tone Vays and Peter Schiff who believe crypto winter is far from over.
Tone Vays, a well known YouTuber, believes there is still no evidence that crypto winter is over. Vays made a $250,000 bet that BTC would fall below $2000 by the 2024 halving, and he’s sticking to his guns. As with all markets, there are bulls and bears who fight to provide legitimacy to their viewpoints. The pessimism in crypto has been steadily decreasing since May, but skepticism over the space dude to regulatory uncertainty is still the crux of the industry.