The Entire Crypto Bull Run Hinges On These Factors: Analyst

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As a seasoned crypto investor with a rollercoaster ride of experiences under my belt, I find Miles Deutscher’s analysis resonates deeply with me. The journey we have shared over the past few years has been nothing short of exhilarating, filled with extreme highs and crushing lows.

On social media platform X, crypto expert Miles Deutscher emphasizes to his 538,000 followers that retail investors play a crucial role in maintaining the longevity of the cryptocurrency market’s bullish trend. To predict whether a new bull run for cryptos is imminent, Deutscher suggests looking back at recent events. He references the significant surge from March 2020 to November 2021, noting impressive growth in various alternative coins as well.

Understanding The Crypto Bull Run Dynamics

Over the course of about a year and a half, from March 2020 up until November 2021, I witnessed an astounding surge in the crypto market – a whopping 2,672% increase! Many alternative cryptocurrencies (alts) even saw multiples as high as 50-100 times during this period. This extraordinary growth was largely driven by substantial financial stimulus measures and heightened public interest due to worldwide lockdowns.

In simple terms, the situation worsened dramatically when LUNA and UST fell in May 2022. This event not only wiped out a lot of market value but also deepened the slump in the wider cryptocurrency market. To put it another way, while the crypto market reached its peak in November 2021, it wasn’t until May 2022 that it received a fatal blow – the collapse of LUNA and UST, highlighting the risks associated with investing in cryptocurrencies at that time.

The consequences of these occurrences triggered a mass departure of individual investors, who were either financially ruined or disheartened by the significant drops. In simpler terms, if an investor had suffered financial losses, they left. Even those who hadn’t experienced financial loss felt compelled to depart due to the widespread fear and uncertainty caused by the market crash, as Deutscher describes it.

2023 brought about a surge of optimism, even amid difficult circumstances, as it saw substantial institutional advancements. One such advancement was BlackRock’s application for a Bitcoin spot ETF in June, which eventually got approved. This move not only indicated a promising development on the horizon but represented a significant change in how major institutions perceive Bitcoin. As Deutscher emphasized, this was a pivotal moment that could have started a new chapter for Bitcoin and potentially the entire crypto market.

By January 2024, the crypto market experienced a significant rise in Bitcoin prices, hitting record highs post the successful debut of the ETF. According to Deutscher’s analysis, approximately $17 billion has been invested into Bitcoin spot ETFs this year, emphasizing the substantial role institutional investments play in boosting Bitcoin’s worth and influencing overall market opinions.

Nevertheless, Deutscher cautions about the altcoin market’s performance, as it hasn’t mirrored Bitcoin’s success. He suggests that the new dynamics in the market, brought on by the ETF, are responsible for this difference. These changes have disrupted traditional patterns of liquidity and investment. According to him, “This cycle is being driven primarily by the BTC ETF. In contrast, the last cycle was driven more by macroeconomic conditions.”

When Will The Bull Run Return?

As a crypto investor, I can’t help but look forward and consider the factors that might lure retail investors back into the game. One significant factor is Bitcoin reaching new all-time highs, perhaps even surpassing $100,000. This could spark renewed excitement throughout the crypto market. It would be like a fresh coat of paint over some cracks, as it would undoubtedly bring media attention, trigger a rotation towards altcoins, and restore optimism among investors.

German points out that people naturally tend toward gambling, and he suggests that the excitement of potentially large profits could lure retail investors back into the market if altcoins continue to rally strongly. He invoked the Pareto principle as a reminder that major market gains frequently happen towards the end of the investment period.

In essence, Deutscher points out that about 80% of the profits from a bull market occur during its final 20%, implying that most retail investors enter the market late. However, he suggests we might be getting ahead of ourselves (in terms of time in the cycle) at this point.

Furthermore, he highlights the prospect of innovative applications in artificial intelligence, gaming, and decentralized finance (DeFi) to generate intriguing new applications for cryptocurrencies. He proposes that even a handful of successful implementations could lead to widespread acceptance, promoting a more enduring fascination with the crypto market.

Due to the current circumstances, Deutscher maintains a positive outlook on the reemergence of retail investors. In summary, his perspective is that yes, retail investors have largely vanished, but there are sound explanations for this departure. This particular cycle differs significantly due to these reasons. However, a minimal shift could bring them back sooner than expected.

At press time, BTC traded at $59,650.

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2024-08-29 10:53