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The Crypto market is still in a deep winter sleep and there is no real recovery in sight. However, the next crypto bull run is inevitable. It’s not a question of if it will happen, but when? Markets work move in cycles, and understanding this basic premise about how markets function will keep you warm throughout the coldest crypto winter weeks.
Diamond Pigs Investment Strategies Performance 1st May – 7th September 2022
There are a number of important factors that may trigger the next crypto bull run, which we consider below:
Ethereum
The growth of ether’s market cap, as well as that of stable coins and alternate layer 1 blockchains as well as the Bitcoin failure to act as a hedge for inflation, has meant that “Bitcoin’s dominance is constantly declining in the overall crypto ecosystem. The upcoming Ethereum merge to Proof of Stake is another step for a new era in the crypto world. The new narrative will position Crypto as an “innovation-driven” rather than a macroeconomics asset class. Some even suggest that if Ethereum succeeds in building the blockchain digital economy, it could be adopted as the main digital money and will take over Bitcoin as the number 1 digital asset.
Reversal trend for the DXY and US 10 & 20 year bonds
DXY – an index of the value of the United States dollar relative to a basket of major currencies has recently hit its highest level since 2002. With high inflation globally and the expectation that the Fed continues raising rates aggressively, the US bond 10 and 20 is trending up as well. However, lower PCI (Price Consumer Index) numbers in September and ISM (Manufacturing Index) below 50 (currently on 56.9) will indicate that the US is entering a recession. That will lead to a change in the Fed strict monetary policy, a weaker dollar and bullishness for on-risk assets that will drive the crypto market upwards.
More retail adoption and global regulatory framework
The International Monetary Fund (IMF) published this week a report stating that It’s only in the past few years that crypto assets have moved from being niche products in search of a purpose to have a more mainstream presence as speculative investments, hedges against weak currencies, and potential payment instruments.
The IMF is also calling for a global response” that is coordinated, consistent, and comprehensive, they concluded, elaborating: A global regulatory framework will bring order to the markets, help increase consumer confidence, lay out the limits of what is permissible, and provide a safe space for useful innovation to continue.
Widespread adoption may fuel the next crypto bull run, as the development of a supporting the lightning network (Bitcoin payment infrastructure) might facilitate the ease and use of crypto. The more users and use cases that BTC has, the more valuable it becomes. In addition to consumer confidence, a willingness on the part of investors to put their money in financial offerings such as Bitcoin EFTs could contribute to the next crypto bull run.
In the meanwhile. Hang in there and use the downturn in the market to try out Diamond Pigs Play Mode where you can select each of our investment strategies and view the results over a period of time. Simply select the starting date and your desired invested amount and view the performance of each strategy in real time.
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