Cryptocurrencies are more expensive and cheaper in specific market cycles: bull market and bear market periods. Only that some signals show that the current cycle will be different – it is the supercyc we expect. It is a unique, elongated cycle of growth that breaks the existing market schemes.
SUPERCYK, so this time it will be different?
For years, Bitcoin and Altcoin have been functioning in a certain way. Bitcoin was more expensive in similar months, just like Ether. Now it is different, so far we do not have Altcoin Season, which is a strong growth of alternative cryptocurrencies for BTC.
Why is this happening? First of all, the macroeconomic environment has changed: so far cryptocurrencies have worked with low interest rates in the background. Even if the Fed lowered them, they were not high. Just look at the chart below:
In 2019, the feet were at the level of 2.5%. Then they began to be lowered. The breakthrough only occurred in 2022 – the Fed began to increase the percentage rates. – up to 5.5%. Then the central bank began cutting, but they ended in the range of 4.25-4.5%. Further federal reserve was paralyzed by Donald Trump, who terrified officials with his customs war. He made Jerome Powell and his colleagues simply scared of further discounts – they decided that the duties introduced a large turmoil in the economy that it was better not to risk and cut as quickly as they could.
During the last press conference, the head of the Fed admitted, however, that we could count on reductions this year. Anyway, even according to the Fed Watch Tool, at the end of the year the feet will be in the range of 3.5-3.75%. This means as many as 3 cuts – each 25 pb. The process is to start in September.
And here we come to my main thesis: the supercycle will probably occur, because the process of discs will start in September and will last for several months. It is not just that Powell and his people will start cutting. Remember that the term of office of the current president of the Federal Reserve ends next year, and someone closer to Trump will replace it. The US President has long been demanding discounts, but Powell defends himself against his pressure. Trumpowski, the head of the central bank, will start conducting a more aggressive policy – he will and will cut, and will probably start quantitative loosening.
These two processes – loosening and cutting the feet – mean first the bull market at Ethher, and then Altcoin Season. And that’s why I am of the opinion that this cycle may last much longer and “leave” outside 2025.
Company purchases and regulations in the USA
However, that’s not all. In the USA, we see the developing BTC shopping trend by companies that duplicate Strategy strategy. This can additionally drive the demand for bitcoin.
On the web you can find even rankings of companies that are buying BTC for racing.
In addition, American politicians regulate the Stablecoin market, which in turn means the development of blockchains on which they are based. Ethereum reigns in this field.
Not only that, note that the development of the Stablecoin is in the interest of the US. According to the regulations that were voted in Congress, the issuer of Stablecoin must have covered his assets in US bonds. And this means the creation of a new, large market for bond buyers, which will help the USA get into debt at a lower cost.
Still countries can follow the market for the market. Today, Bitcoins copies of Bhutan, for years bought a El Salvador. The USA has their own reserve, but they cannot actively supply it with new bitcoins. Although work is to be carried out in this field: the government analyzes how to increase its BTC resources without involving tax revenues. Probably, for example, the exchange of gold with cryptocurrency is at stake.
The question is also whether ETFs will ultimately disturb cyclicality and will not make the cryptocurrency market heavily correlated from the stock market. Thus, the cryptopark would become a “ordinary” market, not something special, governing the law of cycles.
Summary: Cyclicality ceases to apply?
This cycle will answer the key question: what does the cryptocurrency market really depend on? If from the monetary policy of the fed, the current bull market will last longer than the previous ones, because it indicates that there are months of stronger cuts and maybe even quantitative loosening.
Not only, however, the fed’s policy can speak for a supercyc. We currently have an unprecedented time in the history of cryptocurrencies – the US liberalizes their policy about Bitcoin and Altcoins, large companies invest in BTC and ETH, and in the interest of the government from Washington is to support the development of dollar stableins.
More and more facts are in favor of a supercyc. But will my thesis work? We will find out in a few months.
The text is not investment advice.
