Is this crypto bull run different? Bitcoin’s (BTC-USD) next move could provide the answer. To understand where BTC’s price might go from here, we’ll examine past cycles, the role of altcoins, macroeconomic influences, and the impact of the U.S. election year.
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Bitcoin Sets the Stage
Bitcoin has a habit of leading the charge in crypto bull markets. Looking back at the 2015-2017 and 2019-2021 cycles, Bitcoin’s initial surge built confidence and paved the way for a broader market rally. As Kelly Ye notes to CoinDesk, “Bitcoin initially led the market surge, establishing confidence and setting the stage for a broader rally.” Currently, BTC dominance is climbing from its post-FTX low, suggesting there’s still room for Bitcoin to grow before altcoins (alts) catch up.
Altcoins: The Late Bloomers
Altcoins tend to shine brighter later in the cycle. According to CoinDesk, during the second half of the 2015-2017 cycle, altcoins saw a staggering 344x return compared to Bitcoin’s 26x. Similarly, in the latter part of the 2019-2021 cycle, altcoins achieved a 16x return versus BTC’s 5x. We’re about halfway through the current cycle, and altcoins are still lagging behind BTC. This pattern hints at a potential altcoin boom in the coming months.
Macro Economics and Crypto
The crypto market, like other high-risk assets, is highly influenced by global liquidity conditions. In previous cycles, a 30-50% increase in global net liquidity boosted the market. Recently, however, tightened liquidity led to a Q2 selloff. Yet, with Q2 data showing a slowdown in inflation and growth, the Fed is likely to cut rates soon, which could give the crypto market a significant boost. The odds of a rate cut in September have jumped to more than 95%, up from 50% at the start of Q3.
The Election Year Effect
U.S. election years have historically overlapped with major crypto rallies. With Trump endorsing crypto and the topic becoming central in the election, there’s an added layer of market movement potential. According to a research note by Grayscale, amid this uncertainty, crypto assets are increasingly relevant to voters, with nearly half (47%) now expecting to include crypto in their investment portfolios, up from 40% last year.
What’s Different This Time?
While history often rhymes, this cycle has its unique twists. On the upside, Bitcoin and Ethereum (ETH-USD) have achieved mainstream adoption through ETFs, drawing record inflows from retail investors and institutions. However, the crypto landscape is now more crowded with a diverse set of altcoins vying for investor attention. Many new projects have limited circulating supply due to airdrops, which could lead to future dilution. Only ecosystems with robust technology and strong user bases may thrive in this cycle.
What Is the Price of BTC?
As we navigate this crypto bull run, watching Bitcoin’s performance, potential altcoin rallies, macroeconomic trends, and election dynamics will be important. Understanding these factors will help investors make informed decisions in a market that’s always full of surprises.
At the time of writing, BTC is sitting at $64,340.
