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What new forces might drive the next crypto bull run? BeInCrypto asked some industry experts for their take.
2021 was a boom year for the crypto markets. It was the year that crypto, blockchain, and web3 took center stage. Facebook rebranded as Meta, banks moved into the space, and NFTs were on the tip of everyone’s tongue.
The 2021 crypto bull could be attributable to many things. Institutional adoption and acceptance of cryptocurrencies by major brands gave the sector a new sense of legitimacy. Low-interest rates during the COVID-19 pandemic led to inflation fears. Hence, investors turned to alternative investments like cryptocurrencies. During the COVID-19 pandemic and subsequent lockdowns, most people spent more time online. That once-in-a-generation event also provided the perfect petri dish for crypto to gain momentum.
Since the rolling disaster that was 2022, the industry has been looking around for the next source of growth. BeInCrypto asked some experts what might drive the next sustained market upswing.
Bitcoin Halving
Bitcoin halving occurs every four years, when the number of new bitcoins miners can mine is cut in half. This limits the total supply to 21 million. This event is programmed into the Bitcoin protocol and is designed to limit the total supply to that number. The next halving will happen in or around April 2024.
“It is the anticipation of Bitcoin halving by investors in the second half of 2023 that can become the main positive stimulus for the market, which should provoke a change in the global trend to an upward one,” Gracy Chen, Managing Director of cryptocurrency exchange Bitget, told BeInCrypto. “After halving, the price of bitcoin always increases, and other cryptocurrencies follow it.”
Protocol Utility
A trend that experts predict in the upcoming crypto bull market is a shift toward emphasizing the usefulness of crypto protocols. This means that investors will focus more on how cryptocurrencies can be used practically in real-world situations rather than solely on their speculative value.
“While past bull markets may have been driven by hype and speculation around certain tokens or projects, I believe that investors are becoming smarter and more discerning in their investment decisions,” said Eric Chen, CEO and co-founder of blockchain protocol Injective, in an interview with BeInCrypto.
“As more people enter the crypto market and refocus their attention on cryptocurrencies, there will be a larger emphasis on the actual value that protocols are bringing to the table. Investors will be looking for protocols that are solving real-world problems and delivering tangible benefits to users,” Chen added.
Instability and Inflation
Bitcoin has had multiple periods where it has been the world’s best-performing asset. BTC has already risen over 60% this year, according to CoinMarketCap. That inflation-busting performance is likely to keep investors talking about crypto, William Zielke, Chief Revenue and Chief Marketing Officer at payment service provider BitPay, told BeInCrypto.
“On a macroeconomic level, inflation is nowhere near its end, and with the recent Fed rate hike, investors continue to express caution,” explained Zielke. “Bitcoin, in particular, is emerging as a hedge against inflation and the growing banking uncertainty, so we’re seeing an increase in its price partly due to investors seeking protection. I think we’ll continue to see crypto reinsert itself into the conversation as the markets search for stability. The market backdrop right now presents an opportunity for crypto to reclaim its moment on center stage amid so much volatility.”
DePINs
Decentralized physical Infrastructure networks, or DePINs, are networks that use blockchain and other decentralized technologies to manage physical infrastructure. This can include things like power grids or transportation systems. Instead of having one central authority in charge, each device or node in the network can communicate and share resources with one another directly, making the infrastructure more efficient and less likely to fail.
“While the largely nascent sector is only beginning to explore its true capabilities, I’ve seen a lot of curiosity for it,” Max Thake, Co-Founder of blockchain network peaq, told BeInCrypto. “Its potential to disrupt rigid industries that have seen little real competition over the past few decades is earning it a lot of eyes. More and more projects seem eager to explore it. It’s a welcome development because, in my opinion, real-world services and value exchanges are where blockchain’s real usability is, not in trading .jpegs. DePINs zoom in exactly on the real world, and I think that their model is the best chance for actual adoption that web3 ever had so far.”
User Design and Education
However, Markus Levin, co-founder of geospatial data firm XYO, believes the industry has a lot to prove after last year. After the dust settles and people begin to trust the sector again, it will still come down to fundamentals.
“2022 poked holes in the crypto ecosystem and revealed imperfections our industry has yet to work through,” Levin opined to BeInCrypto. “For another bull run to capture us by storm, there needs to be a restored sense of authenticity, security, and sustainability in addition to a favorable macro environment.”
“Two big hurdles still remain, user design and education. Blockchain is meant to be accessible to all, but the jargon and community lingo make it feel overwhelming and exclusive to the average user. If we can focus on reputation and infrastructure building to restore faith in the space and continue weeding out the poor projects that lack utility, the bull run is right within our reach.”