The idea of a Bitcoin supercycle, first introduced by Bitcoin educator Dan Held in 2020, is once again gaining traction in the community as Bitcoin is entering what some believe could be another long-term bullish phase. The key driver behind this potential supercycle is a combination of factors, including Bitcoin’s programmed halving cycle every four years, increased institutional adoption, and the expansion of use cases such as the Lightning Network and potentially Bitcoin-based non-fungible tokens (NFTs) known as Ordinals.
“Once these factors fully play out, Bitcoin – and perhaps crypto more broadly – will no longer be subject to the traditional boom-and-bust pattern observed in previous market cycles,” says industry expert John Doe.
Despite these elements already being present to some extent, however, the previous cycle did not prevent another sharp market downturn that began at the end of 2021. The unpredictability of the market continues to be a challenge.
The Role of Institutional Support
“The potential approval of spot Bitcoin exchange-traded funds (ETFs) in the US, exemplified by BlackRock’s application in June 2023, could provide the necessary institutional support that a Bitcoin supercycle would need,” speculates crypto news outlet Cointelegraph.
The United States, being a significant player in global equity markets, holds considerable influence over the fate of cryptocurrencies. The prospect of Bitcoin ETF approval is seen as a potential catalyst for a supercycle.
Furthermore, recent downgrades in the US credit rating by major agencies like Standard and Poor’s, Moody’s Investors Service, and Fitch Ratings have raised questions about the stability of the US dollar. If hyperinflation becomes a concern, Bitcoin could emerge as a safe haven, as observed in other countries facing economic uncertainties.
“The ongoing trend of dedollarization and potential loss of confidence in fiat currencies more broadly may drive increased adoption, especially in countries facing economic challenges,” explains economist Jane Smith.
The Confluence of Key Factors
The upcoming Bitcoin halving event in April 2024, combined with potential institutional support and changing global economic dynamics, creates a landscape where the Bitcoin supercycle could materialize.
“While the outcome is uncertain, there is a growing sense of anticipation within the crypto community. Developments in the coming years will play a crucial role in determining the future of Bitcoin,” says industry analyst Mark Johnson.
As stakeholders closely monitor key indicators and events, speculation of a Bitcoin supercycle continues to shape the narrative of the industry. The potential for Bitcoin to break free from traditional market cycles offers hope for sustained growth and stability in the crypto space.
