How Bitcoin/Cryptocurrency Bull Cycles Are Different

Author: Crypto with Lorenzo; Compiled by: Vernacular Blockchain

The omens of this bull market indicate that there will be It will surpass previous bull markets.

Bitcoin is about to hit a new all-time high, bionic coins are skyrocketing, and Ethereum is finally accelerating towards new highs.

The bull market has indeed returned, but this time it's more active, and it's happening a little earlier than many expected.

Let’s dig into what’s different about this market.

1. Now many institutions have officially joined the Bitcoin market

Strictly speaking, These institutions have been involved for several years, most likely since 2014. Because these institutions are so smart and equally cunning, many people have feigned ignorance long enough and deceived enough people, including various adversaries, into believing that Bitcoin is useless and undesirable.

Unless you have never paid much attention, you must have heard that the U.S. Securities and Exchange Commission approved eleven spot Bitcoin ETFs in January, resulting in several Billions of dollars flowed into these publicly traded funds.

This is positive in some ways, but a problem in other ways, as this is the first cycle in which institutions have significantly increased their interest in bit exposure of the currency, and the situation will be similar once the United States approves a spot ETF for Ethereum.

2. Act early

This is Bitcoin’s halving in its four-year cycle It is rapidly approaching all-time highs for the first time; the upcoming halving (expected to occur on April 21) will be its fourth.

As the BTC/USD price chart below shows, we are ahead of the schedule, which further adds to optimism and excitement about the post-halving outlook.

Like we saw earlier this week, the entire market suddenly collapsed, with BTC falling from $69,000 to approximately $61,800 in just six hours dollars, but that was short-lived. Since then, BTC has recovered to $66,000 (up about 200% over the past year), ETH is trading around $3,800, and other altcoins have mostly recovered from their sudden declines.

Next month's BTC halving will further exacerbate the supply shock, and most of the sell-off will soon be bought by others, usually by savvy long-term holders , whales and other institutional investors buy.

BTC/USD price chart since 2009, using a logarithm of 10 to emphasize price growth after each halving event. Orange arrows indicate previous iterations; green arrows point to next month’s halving. Source: Highcharts.com (via BuyBitcoinWorldwide). The arrows are added by the author to approximate the date of each halving.

While Bitcoin remains the dominant topic, still accounting for more than half of the overall market share, Ethereum is about to deploy long-awaited scalability improvements - Dencun and Proto-Danksharding—but three new narratives that are uncommon in 2024 have emerged.

Artificial Intelligence/Artificial General Intelligence (AI/AGI), Layer-2 and the latest popular abbreviation, dePIN (Decentralized Physical Infrastructure Network).

Gaming/playing and NFT-related cryptocurrencies are experiencing a renaissance, but projects in the above categories are likely to be on the rise as we enter this bull market Cover them up.

Artificial Intelligence/Artificial General Intelligence (AI/AGI): Since November 2022, people have been interested in OpenAI’s ChatGPT, DALL·E and related deep learning The release of the model lost its mind. Adding to the hype is OpenAI’s upcoming release of Sora, OpenAI’s text-to-video model expected to be released later this year (the exact date is still to be determined).

When OpenAI announces the exact date, the AI-related cryptocurrency is expected to perform more strongly than other digital assets in the space. dePIN assets closely related to artificial intelligence will also benefit.

Some related assets to watch include Singularity NET (AGIX), Ocean Protocol (OCEAN), Fetch.ai (FET), and The Graph (GRT), so , please pay close attention to these projects.

Layer 2, which focuses on improving Ethereum’s scalability, has climbed up the rankings, with Immutable (IMX) and Optimism (OP) performing well. Arbitrum (ARB) and Loopring (LRC) are other players in the space.

Some sidechains also help Ethereum with scalability, but they exist within their own network rather than sitting on top of Ethereum like L2 . Celestia (CEL) has been one of the best performers over the past 12 months, but Polygon (MATIC) is still worth watching in the coming months.

This will be the first bull cycle where L2 is able to demonstrate what it offers by ensuring Ethereum transactions are cheaper and faster, unlike 2021. Source: L2 Beat

The combination of Ethereum and L2 can now consistently process over 100 transactions per second (TPS). I expect this number to reach over 500 transactions per second (TPS) by the end of the year after taking into account continued L2 improvements, Dencun upgrade and Proto-Danksharding planned for next week.

DePIN: This involves projects that promote distributed ledger technology (particularly blockchain) for more practical use cases than just Web3. It aims to disrupt centralized setups in every aspect of our society by providing distributed and more cost-competitive alternatives.

Some examples of DePIN include:

—Cloud computing, specifically file storage and usage GPU access for image/video rendering. Cryptocurrencies worth watching include Render Network (RNDR), Arweave (AR), Filecoin (FIL), and Golem (GLM).

— Improved and more affordable Internet access globally: for example, Helium Network (HNT) and its associated tokens — Helium Mobile (MOBILE) and the Internet of Things (IoT)Token.

— Decentralized car sharing or delivery services related to projects involving the Internet of Things, such as Iota (IOTA) and VeChain (VET), covering Various use cases.

— Distributed video streaming/sharing platforms, such as Livepeer (LPT) and Theta (THETA), are popular examples.

Many of these featured assets have produced impressive gains recently, outperforming most of the top 200 crypto assets, many of which have been in decline since January 2023. It has been performing well since last month.

Just like pizza without mozzarella cheese, the crypto market would not be complete without bionic coins.

Despite being overtaken by SHIB, WIF and FLOKI, DOGE once again joins the action, aiming to return to new all-time highs and maybe (just maybe) reach the mysterious 1 dollar each.

In addition to dogs, of course, we have Pepe the Frog, alpaca meme coins (SOLAMA), Trump-themed coins, and even a misfit The minor version is also booming, gaining 300% in less than a week.

Although they are a bit embarrassing, these coins generate life-changing gains in a matter of weeks. Experienced cryptocurrency traders will know how to make 10-20x profits quickly by taking advantage of the rapid pumps and dumps associated with many of these coins, ideally converting them to Bitcoin and Ethereum to keep Return on investment continues to grow as we enter this bull market.

On the contrary, those risk-takers may panic buy at the top and then suffer losses, so ultimately expect the prices of these coins and tokens to plummet.

3. Overcoming a series of controversies, collapses and lawsuits

Despite Elizabeth Warren , Gary Gensler, Brad Sherman, and Nouriel Roubini—at least when it comes to Bitcoin, we shouldn’t forget Peter Shuffy and Jamie Dimon— There was hope that this sector would be brought to an end, but it once again demonstrated its strength by enduring a lengthy bear market between November 2021 and February 2023.

We have had to bear the brunt of multiple high-profile crashes in this space: FTX and Alameda Research, Terra Luna, Celsius, 3AC... the list goes on continue.

Binance, Kraken, Coinbase and even Gemini, which was once regarded as a model for U.S. cryptocurrency regulation, were also sued by the U.S. Securities and Exchange Commission, and the chairman of the commission, Gary Gensler remains under his leadership.

However, the situation began to change when Grayscale successfully forced U.S. regulators to consider its application to convert the Bitcoin Trust (GBTC) into a spot Bitcoin ETF .

Furthermore, U.S. Supreme Court Justice Analisa Torres ruled that when trading XRP on trading platforms and algorithms (e.g., decentralized trading platforms) , XRP is not a security, thus giving Ripple a partial victory.

Yes, technically the SEC v. Ripple Labs lawsuit started before the previous (2021) bull run, but Torres The judge's decision coincides with this bull market.

This is coupled with ongoing accusations from some misinformed politicians, business leaders, and ordinary people who have chosen to discredit the entire cryptocurrency space, claiming that it is all a sham , rather than targeting those real scam projects, nor giving due recognition to those legitimate projects.

4. Higher efficiency, better infrastructure and more intense competition

Just like the Internet in its early days, cryptocurrency is still relatively slow, clunky, often inefficient, and not as user-friendly as it could be.

If you are over the age of 30 (or even 25 in some cases), you probably remember that iconic dial tone that can't be had while using a landline phone calls, and at speeds of Kbps (yes, you read that right).

Just as the Internet became thousands of times faster and more advanced in the 1980s and early 1990s than in its early days, so too has this field Will become fast while maintaining security and "enough" decentralization.

Here are other positives worth reflecting on since the last bull market:

• Solana has established itself as another Ethereum competitor, recovering from a horrific bear market and a series of notorious network outages.

• Ethereum successfully transitions from proof-of-work to its proof-of-work staking chain as The Merge (in 2022) a part of.

As mentioned above, L2 is becoming more mature.

• Other L1s like Cardano, Avalanche, Cosmos, and Polkadot continue to develop their ecosystems and Continuous improvements since 2021 to attract new developers and web users.

• El Salvador and the Central African Republic (CAR) have broken the mold (and multiple critics, notably the IMF and the World banks) and use BTC as legal tender.

• Improved wallet integration and enhanced Web3 experience by integrating NFTs

• More trading pairs, supported trading platforms (centralized and decentralized), better UX and UI for DEX, etc.

• The growth of liquid staking and simpler, more accessible on-chain staking solutions, for example, for Ethereum and Polkadot of.

• The implementation of Ethereum Improvement Proposal EIP-1559 resulted in burning a small amount of ETH every minute, making it (slightly) deflationary. Since its launch in August 2021, more than four million ETH have been burned.

5. Summary

As an asset class and The broader Bitcoin/cryptocurrency community, we’ve been on a long journey, but we see the light at the end of the tunnel… and it’s quickly approaching as most digital assets are heading towards all-time highs.

My advice to you as I enter my third bull market cycle, especially if you have not experienced this market or a similar volatile market , is:

• Develop a profit strategy. There's no one size fits all, so do what works for you.

• Don't use leverage/margin trading unless you know what you are doing; using stop loss is crucial, otherwise you Losses are likely to be incurred. If you insist on doing this, I strongly recommend that you use a demo account and do your own research before trading with real money.

• Get advice from several different sources, as long as they are knowledgeable, rational, and experienced. I say "several" because it's possible to listen to too many sources and get conflicting or misleading information. I wrote an article profiling my favorite cryptocurrency commentators/writers.

Don’t forget to take profits as you move forward, some of which can be used when the Bitcoin and cryptocurrency markets eventually collapse buy again. If history repeats itself, I think it will be at least another 12 months, but a black swan event could emerge and wreak havoc, so be prepared.

Get ready for further price growth in the coming months and even into 2025.

How high do you think Bitcoin, Ethereum, or your favorite coin will go in the 2024-2025 cycle? Leave your thoughts below.