Experts explained how the entry of institutions into cryptocurrency has impacted the industry and why the current growth cycle is unique.
Analyst Willie Wu predicted that the current bullish trend would continue for another year or so. The current growth cycle differs in many respects from similar past periods, the specialist says. According to Wu, over the past year, serious investors have come to the crypto market with larger investments, they are focused on the long-term accumulation of digital assets. These factors indicate that the current growth cycle will be longer.
The theory is justified
Willie Wu's words make sense even without taking into account the entry of institutional investors into the market, says Nikita Zuborev, senior analyst at Bestchange.ru. According to him, according to historical data, each subsequent growth cycle of bitcoin was longer than the previous one, although there were only three of them.
"One of the factors that speaks in favor of Willie Wu's theory is the entry into the market of a significant number of institutional investors who have the resources to buy out large volumes in order to" average out "in the event of a large depreciation," the analyst noted.
Another factor in favor of the theory, Wu Zuborev considers the relocation of market makes to the West in compliance with all the rules of the new jurisdiction. China's policy on digital assets forced not only miners to leave the country, but also provoked the departure of representative offices of large cryptocurrency exchanges and the outflow of whales, Zuborev explained.
A regular increase in trading volumes in futures for bitcoin almost eliminates sharp and prolonged dips or ups, says Nikita Zuborev, senior analyst at Bestchange.ru. In his opinion, in the foreseeable future, thanks to this, the top 20 cryptocurrencies will begin to show returns comparable to the traditional stock market, without high volatility.
If this scenario is realized, the situation on the cryptomarket will radically change, Zuborev is sure. In this case, the “tail” of the previous growth cycle will be superimposed on the beginning of a new one, which traditionally started a year before the halving, the analyst noted.
“In such a situation, large and long-term failures called“ crypto winter ”will disappear as a phenomenon, and we will only see about half a year of market stagnation in the future,” summed up Zuborev.
The changes have already taken place
The current upward cycle of the digital asset market is clearly different from the previous ones in terms of the rate and rate of growth of bitcoin, says Maria Stankevich, Development Director of the EXMO crypto exchange. As an example, she cited the growth of the first cryptocurrency over the past three months from $ 29 thousand to $ 67 thousand (a rise in price by 131%). This speed is based on the greater popularity and availability of bitcoin as an investment asset, as well as the launch of new derivatives and funds, the expert explained.
On October 19, the first U.S. exchange-traded fund based on bitcoin futures began trading on the New York Stock Exchange (NYSE). Two days after the start of trading, assets under the Bitcoin Strategy ETF (ticker BITO) of ProShares exceeded $ 1 billion. The fund broke the record for the growth rate to $ 1 billion, which was held for 18 years.
“Considering the price dynamics of bitcoin, most likely the peak of the current cycle will fall on the next year, in its first half,” Stankevich predicted.