The history of the crypto market contains many bull runs. These events mark major upswings in adoption, activity, and public awareness for blockchain technology. Additionally, they have led to new all-time highs for many projects, as well as an expansion of features and integrations. As such, there’s a lot of excitement surrounding the next bull run. Here are a few reasons why the crypto market could be on the verge of another bull run and what you can do to capture this moment.
1. Crypto Consumer Spending
Crypto consumer spending is on the rise. The 2024 BitPay Spending Report highlights this growth. The study found that crypto payments were up 20% in Jan 2024 across a variety of industries. This statistic highlights the evolution of digital currencies from store-of-value assets to daily use.
Crypto consumer spending has gone up due to multiple reasons. For one, more merchant processors offer support for digital assets. Companies like Stripe enable businesses to easily integrate crypto payment options into their current PoS system with minimal effort. These systems give vendors the option to receive their payment in crypto or to convert the funding into fiat currency to avoid any volatility.
Another factor driving crypto spending is the increase in crypto debit cards. These financial tools enable users to spend their crypto at any location that accepts credit cards. A crypto debit card will automatically convert your crypto into fiat currency at the time of purchase when the card payment is made at the PoS. This strategy enables crypto users to pay for everyday items without requiring vendors to upgrade their PoS systems.
Crypto spending statistics reveal the mindset of many crypto enthusiasts. For example, philanthropy and nonprofit donations showed a +324% increase. The next highest spending category is precious metal and gold, which is up 205%, followed by electronics and vehicles.
2. ETF Approval
Crypto ETFs continue to add momentum to the bull run. ETFs (Exchange-Traded Funds) are paper assets that represent ownership over another asset. For example, a gold ETF holds physical gold on behalf of its shareholders. This structure brings unique benefits, such as exposure to unregulated assets in a regulatory-compliant environment.
After years of denial, the SEC finally approved the first Bitcoin ETFs on January 10, 2024. Specifically, a total of 11 ETFs gained approval. These ETFs were put forth by some of the most influential names in the financial industry including Fidelity, BlackRock, and Invesco.
This maneuver continues to drive demand for Bitcoin higher as firms seek to sure up BTC holdings to offer ETF to clients. As such, these funds continue to purchase nearly double the amount of new Bitcoin created daily. This scenario, coupled with the growing number of firms seeking to launch new crypto ETFs, is another sign that a bull run is on the way.
3. Politicians Backing
The rising support for crypto assets among politicians can be seen as another indicator that the bull run is imminent. For the last 14 years, there has been a lot of confusion among politicians regarding cryptocurrencies, with many making false statements and fear-mongering to slow adoption. However, the number of politicians who now understand cryptocurrencies is at an all-time high.
There are politicians on both sides of the aisle who see the value of this technology and want to take steps to help ensure their country can remain a pioneer in the market. For example, Senator Pat Toomey introduced a legislative framework geared at enabling stablecoins to innovate without stifling developer capabilities.
Source – Axios
The mayor of New York, Erik Adams, is another US politician with a strong commitment to the blockchain sector. He made headlines when he said he would receive his paycheck in Bitcoin and Ethereum. He is followed by a long list of politicians who want to drive crypto adoption or make their state the premier hub for their activities.
Notably, Ex-President and current Presidential candidate Donald Trump made a complete pivot on cryptocurrencies over the last 5 years. He had been quoted claiming that these assets lacked any value in the past. However, over the last 3 years, he has become more aware of blockchain capabilities. He now stands as a pro-crypto candidate who has launched multiple NFT projects and is even slated to be a keynote speaker at this year’s Bitcoin 2024 conference.
4. More Traditional Integration
There are now more traditional financial institutions supporting crypto activities. From blockchain bank accounts to crypto storage and debt services, the traditional banking sector has made a strong pivot to meet the demands of its clients seeking crypto support. Crypto debit cards, loans, and accounts are becoming more common outside the DeFI market.
Banks have also turned to blockchain services to streamline remittance services. Decentralized options provide lower costs, high transparency, efficiency, and speed. As such, Banks were left with no choice but to integrate these options to remain competitive. Notably, features like interest-bearing wallets and staking pools have been made possible through strategic partnerships with existing crypto custody services.
Soon, you will see the introduction of CBDCs (central bank digital currencies). These digital assets don’t compete against fiat currency but, rather, supplement and enhance it. CBDCs are centralized and bank-issued; as such, they lack the freedom and censorship-resistant capabilities of an open network like Bitcoin. However, they do have full government support, which will help improve the rollout of their support network, which could one day be used for all blockchain assets.
5. Technological Advances
Blockchain tech is one of the fastest-evolving sectors in the tech market. Developers continue to push the envelope by introducing new and innovative ways to drive capital efficiency and the creation of new markets. Recent advancements in scaling and security have further increased the capabilities of these networks.
Blockchain tech advances have kept pace with recent legislation which has resulted in some interesting turns in the direction of the tech. Recently, a drive to tokenize real-world assets has inspired creators to introduce advanced tokenization protocols that improve transparency and streamline the conversion to blockchain process.
AI integration is another exciting tech development that will change the way people interact with blockchain networks in the future. AI chatbots already exist that can conduct in-depth searches, create images, videos, and more. In the future, web-3-powered AI chatbots will enable users to search blockchain data and even initiate complex trading strategies using simple chat prompts.
6. Positive Sentiment
After years of confusion, public sentiment toward Bitcoin and other cryptocurrencies has changed. Today, more people than ever understand the advantages and reasons why blockchain assets are the natural evolution of the economy.
Public awareness has been increased thanks to the combined efforts of developers, politicians, influencers, and more. People around the world now rely on cryptocurrencies to keep their savings protected against inflation, theft, and censorship. As such, Bitcoin has secured a reputation as a strong store of value.
Celebrity support is another factor that can’t be overlooked. More public figures support the use of blockchain assets. Songs, art, and even movies based on cryptocurrencies are more common than ever. For the first time, the majority of people see cryptocurrencies as a positive development that brings many benefits to the average person.
7. Bitcoin Supply Cycle
The Bitcoin halving occurs roughly every four years and is usually followed by a sharp increase in demand for the world’s first crypto. The halving represents a 50% drop in the emission of Bitcoin via its mining rewards system. Originally, the mining reward was 50 BTC. On April 19, 2024, the 4th halving occurred which dropped the mining reward from from 6.25 BTC to 3.125 BTC.
Notably, these rewards are the only time that a new Bitcoin is created and enters the market. This predictive issuance coupled with a limited supply of 21M BTC in total has helped Bitcoin fight inflation and store value efficiently. These factors will increase demand for cryptocurrencies moving forward as more people become aware of their capabilities.
8. Legal Precedent
The recent SEC Ripple lawsuit results have helped to bolster confidence in the market. On July 13, 2023, a judge issued a decision stating that Ripple didn’t violate securities laws when it offered XRP tokens to users but did violate regulations when it offered the tokens to institutional investors. The court’s decision heavily favored Ripple, which has driven positive sentiment and set a legal precedent for future actions. Every precedent helps to set a framework for future blockchain platforms.
9. Traditional Support
The traditional investment sector wants to enter the blockchain sector. It was only a few years ago that major investment funds were scared to touch decentralized assets like Bitcoin. Nowadays, this is not the case with some of the world’s most reputable financial firms, such as Blackrock, entering the decentralized economy.
Several major tech firm CEOs have recently expressed support for blockchain assets. Michael Dell, CEO of Dell Technologies, is among a growing number of tech moguls who have praised decentralized assets and helped to point out why they improve efficiency and open the door for new opportunities.
10. Global Events
Global events are another factor to consider when discussing what’s fueling the crypto bull run. Multiple conflicts are currently underway, which has led some to lose faith in the centralized banking system, which many see as weaponized. The decentralized economy offers an agnostic approach that provides nations with an efficient and transparent way to conduct transactions in an emissions-free manner.
As the many conflicts currently underway begin to expand, there is going to be an even stronger demand for a universal store of value that is immutable, can’t be created, and is readily available to the masses. Only cryptocurrencies can offer these options via an independent and open network. Additionally, nations continue to seek out ways to transform their economy into blockchain hubs. Countries like El Salvador have already taken monumental steps to make Bitcoin legal tender, meaning it must be accepted by all governments and merchants.
11. Multi-Polar World
Hopefully, the world can avoid a global conflict, but there is no changing the fact that a multipolar economy is emerging. Already, there are collaborations between BRICs and other nations to create a new global currency to rival the dollar. This gold-backed CBDC would create a viable alternative to those shunned from Western economic institutions due to political reasons.
In the future, China, India, Russia, and other growing nations will gain more control over the global economy. Analysts predict that this multi-polar world will rely heavily on decentralized assets because of their independent nature, making them the ideal currency for fast-paced politically shifting environments where fiat funds could lose all value overnight due to regime changes and other factors.
12. Inflation Risks
Inflationary risks are another reason why more people have turned to cryptocurrencies. In some nations, inflationary risk has risen to the point that prices in the grocery store fluctuate every hour. For the residents of these economies, a secure store of value like Bitcoin is the best solution.
Even in industrialized nations like the US, inflation remains a huge concern. Notably, the Saudi Arabian government recently expressed concerns regarding an agreement that made the US dollar the primary way to buy and sell oil on their markets. This maneuver is seen by many analysts as negative for the currency which could lead to massive inflation in the US.
The reason inflationary risk is heightened is because, in the past, any excess USD would be quickly absorbed by foreign countries so they could use it to fund their need for fuel. However, now that there are alternatives, it’s likely that the added circulation won’t get siphoned out of the US economy as quickly leading to hyperinflation in the coming months. If this scenario plays out, Bitcoin will become one of the premier ways for citizens to keep their funds protected.
Who Let the Bulls Out
It doesn’t take long to see that the signs all read “Bull Run Ahead” for crypto users. All of the factors listed here combine to form the full picture, which demonstrates a clear demand for and need for cryptocurrencies moving forward. For now, you should position accordingly, as the next bull run looks like it’s already begun.
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