A reader wrote in a message: The bubble has been punctured, allowing the currency circle to return to calm, and all markets to return to calm. Now it is a good thing, and it is also a mirror to expose the devil.
It is hard to say how other markets are, but I think the crypto ecosystem should indeed return to calm. As an investor, we should reflect on the various ambiguous, incredible but considered "normal" views and ideas accumulated over the years.
In recent years, we often say that the bull and bear cycle of the crypto ecosystem is four years, and this "four-year" cycle is caused by the halving of Bitcoin.
But now looking back at the past bull and bear cycles of Bitcoin and the crypto ecosystem, I think it seems more appropriate to separate the bull and bear cycles of Bitcoin and the bull and bear cycles of the crypto ecosystem.
Before further elaboration, it is still necessary to define what is a bull market for Bitcoin and what is a bull market for the crypto ecosystem.
My definition of the bull market for these two is relatively simple and direct:
The bull market for Bitcoin is when the price of Bitcoin breaks through the previous high.
The bull market for the crypto ecosystem is when the price of Ethereum breaks through the previous high.
As long as it does not break through the previous high, it is not a bull market in my opinion.
Because Ethereum was launched in 2015, we will look at the bull market of Bitcoin and the crypto ecosystem after 2015.
Bitcoin halved in 2016, and entered a bull market in 2017.
In 2017, the Ethereum ecosystem ushered in its first major outbreak since its launch: ICO. This caused the price of Ethereum to enter a bull market in 2017, and led the entire crypto ecosystem into a bull market.
Bitcoin halved again in 2020, and entered a new round of bull market in 2021.
The outbreak of the DeFi ecosystem in 2020 and the outbreak of NFT, chain games and other ecosystems in 2021 triggered the price of Ethereum to enter a bull market, and led the entire crypto ecosystem into a bull market again.
In these two bull markets, the bull market of Bitcoin and the bull market of the crypto ecosystem went hand in hand. So this phenomenon leaves us with a strong impression:
Bitcoin's bull market every 4 years will inevitably trigger a bull market in the entire crypto ecosystem. Bitcoin's price record every 4 years will inevitably bring the entire crypto ecosystem to a new high every 4 years.
But we should think carefully:
What factors triggered the Bitcoin bull market?
What factors triggered the crypto ecosystem bull market?
The more direct cause of the Bitcoin bull market seems to be the halving every 4 years.
And I think the more direct cause of the crypto ecosystem bull market is the innovation in the Ethereum ecosystem, including innovations in applications, scenarios and models.
However, is there any inevitable connection between the two?
Or will the halving of Bitcoin inevitably trigger the outbreak of 1CO, DeFi, NFT and chain games in the Ethereum ecosystem?
I can't see it.
I think that in the past two bull markets, it was just because of some kind of coincidence that the crypto ecosystem happened to have an outbreak every 4 years and these outbreaks happened to resonate with the halving of Bitcoin.
However, there is no inevitable causal relationship between the halving of Bitcoin and the innovative outbreak of applications, scenarios and models in the crypto ecosystem.
That is to say, we cannot infer that the crypto ecosystem will also go bullish from the halving of Bitcoin.
This non-necessary relationship is fully reflected in this round of market.
In 2024, Bitcoin will be halved again, and at the end of 2024, the price of Bitcoin will hit a new high again.
But has there been any lasting and powerful innovation in the Ethereum ecosystem that can be compared with 1CO, DeFi, NFT, and chain games in this round?
No.
So the price of Ethereum did not break the new high of the previous round, let alone the tokens of most crypto ecosystems.
If there is no inevitable causal relationship between the two, then the biggest lesson we have to learn is:
In the future, we should try to separate the trends and cycles of Bitcoin and the crypto ecosystem, and stop thinking that the bull and bear cycles of Bitcoin must correspond to the bull and bear cycles of the crypto ecosystem.
The bull and bear cycles of Bitcoin may still be judged by the method of halving every 4 years in the future.
But to judge the cycle of the entire (Ethereum) crypto ecosystem, we still have to focus on the ecosystem and find new applications, new scenarios, and new models that appear in the ecosystem.
As long as these innovations appear, we should see the next bull market in Ethereum and even the crypto ecosystem. This cycle does not have to be fixed.
Without these innovations, the new bull market in the crypto ecosystem will probably still not come. At most, it will only fluctuate in response to various short-term stimuli, but will not create a truly strong bull market.
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