Hello everyone, this is the Dardion editorial team, and today we will address this important question. Six months after Bitcoin’s halving, its price remains around $60,000. Experts expect the bull market to begin in mid to late 2025, when the effects of the halving become more noticeable.
Analysts from Bloomberg reported that in September 2024, the BTC price increased by 10%, and since the beginning of the year, it has risen by 56%. Typically, Bitcoin tends to decline by an average of 5.9% in September. The rise in Bitcoin’s price last month could be attributed to the lowering of interest rates in China and positive unemployment statistics in the U.S. Bloomberg experts believe that the cryptocurrency market is waiting for the results of the U.S. elections, after which a bull run may occur.
What Is a Bull Run in Cryptocurrency?
A bull run in cryptocurrency is a period during which prices of cryptocurrencies rise rapidly. Imagine you bought Bitcoin for $10,000, and a few months later its price soared to $50,000. That’s a bull run: everyone in the market is optimistic, buying assets en masse, which drives up their value.
For example, in 2020, following Bitcoin’s halving, a significant bull run began, and by early 2021, its price had risen from about $10,000 to over $60,000.
Why Does It Happen and How Does It Work?
One reason for a bull run is the halving of Bitcoin, which reduces the number of new coins entering the market, creating scarcity and driving up prices. For instance, in 2020, following the halving, Bitcoin’s price increased from $10,000 to over $60,000 within a year.
Another catalyst is the influx of institutional investments. When major players, such as funds or companies, start buying cryptocurrencies in bulk, it creates a wave of purchases. In 2020, companies like MicroStrategy and Tesla began investing in Bitcoin, which further fueled interest and prices.
Economic instability can also trigger a bull run. During times of crisis or inflation, investors seek alternative assets to preserve their capital, often turning to cryptocurrencies. In 2020, amid the pandemic, many investors chose crypto, contributing to its value growth.
What Prevents the Start of a Bull Run in Cryptocurrencies?
Regulatory pressure can significantly slow down a bull run. For example, in 2021, China’s ban on cryptocurrency mining led to a mass exodus of miners and a drop in Bitcoin prices. Similar measures from major countries can instill fear among investors and lead to sell-offs.
Macroeconomic factors also impact the cryptocurrency market. When central banks, like the U.S. Federal Reserve, raise interest rates, investors tend to move away from riskier assets, including cryptocurrencies. In 2022, the rise in rates diminished interest in Bitcoin, stalling its growth.
Market corrections are inevitable even during a bull run. For instance, in early 2021, when Bitcoin reached $60,000, many large investors took profits, causing a temporary price drop to $30,000. Such sharp declines can scare off less experienced participants and temporarily slow growth.
Catalysts for a Bull Run in 2024
Analysts note that Bitcoin currently lacks the momentum needed to break through resistance levels, but the situation may improve in October. The ratio of long to short positions is at a low level, which has historically preceded price growth. Additionally, the upcoming employment report in the U.S. and Federal Reserve Chairman Jerome Powell’s speech could significantly influence BTC prices.
Experts at 10x Research predict that Bitcoin may reach a new all-time high (ATH) in October due to potential interest rate cuts by the Fed and payments to creditors of the bankrupt FTX exchange, which could initiate a new bullish cycle.
The Key Player of the Next Bull Run – MicroStrategy
In 2020, MicroStrategy became the first publicly traded company to buy Bitcoin, and it remains the largest holder of the first cryptocurrency, with a balance of 140,000 BTC worth over $4.17 billion. The company’s aggressive investments attracted the attention of institutional investors, prompting other tech giants like Tesla and Square to also purchase Bitcoin.
MicroStrategy’s founder, Michael Saylor, decided to allocate part of the company’s treasury reserves into Bitcoin, making the first purchase of 21,454 BTC for $250 million at an average price of $11,652. Saylor emphasizes that Bitcoin is a reliable store of value that can protect against inflation driven by “cheap money” policies.
As of October 2024, MicroStrategy continues to actively accumulate Bitcoin, with its reserves now totaling 79,000 BTC. The company has launched a strategy to purchase cryptocurrency, resulting in an investment of $1.125 billion in 2020.
How to Prepare for a Bull Market Using MicroStrategy as an Example?
MicroStrategy closely monitored the economic situation, including central bank policies and inflation. For instance, the rise in inflation in 2020 prompted the company to buy Bitcoin as a safe-haven asset, highlighting the importance of assessing macroeconomic conditions.
Rather than focusing on short-term investments, MicroStrategy concentrated on long-term Bitcoin holdings, allowing the company to benefit from price increases. Investors can similarly create long-term portfolios to minimize the impact of short-term fluctuations.
While MicroStrategy actively invested in Bitcoin, the company considered risks and opportunities for diversification. Investors can allocate their funds among various cryptocurrencies and traditional assets to reduce risks.
Michael Saylor has emphasized the importance of confidence in Bitcoin as a revolutionary technology. Understanding projects and technologies behind cryptocurrencies can help investors better grasp their potential and make informed investments. MicroStrategy actively bought Bitcoin when its price was low, demonstrating readiness for market changes. Investors should monitor trends and be prepared to adapt to new conditions when making buying or selling decisions.
Conclusion
Determining the exact date of the next bull run is challenging, as it depends on various factors, including macroeconomic conditions, regulatory changes, and investor interest levels. However, many experts anticipate that the potential for growth may arise in 2025, especially following possible changes in the U.S. Federal Reserve’s policies and an improvement in market sentiment. Thank you for reading! 😊
