What Is Going to Be Special About the Next Bull Run?
By Stephan Cummings on ALTCOIN MAGAZINE
It’s quite alright to expect that one day (probably this year) there will be another cryptocurrency bull run. Some crypto holders expect it only because of optimism while others name numerous reasons why (and even when) it should happen. Let’s put these things asides and imagine that the bull run is going to happen this year and try to answer the question of how different it would be in comparison to the bull run of late 2017?
Briefly, the upcoming bull run will be the first bull run backed by numerous institutions and giant business companies. Moreover, for the first time, there will be really usable blockchain projects with high level of decentralization, high scalability, and competitive performance. Another dominant topic is the upcoming halving of the Bitcoin reward (it will happen in 2020). It is believed that prior to the block reward halving the price will rise. The prices of the rest cryptocurrencies will grow respectively.
The Previous Bull Run
The market was quite chaotic because the major public had no knowledge of what blockchain is but was affected by the intense media hype that was encouraging people to make quick money by buying some cryptocurrencies. Some blockchain projects had a long history of development those days, but it was yet to call them well-developed. The flaws were too significant, so most new players were utilizing these coins only for speculation.
The previous bull market was notable for rising of such currencies as XRP (centralized), BTC and ETH (both have low scalability), and some Bitcoin clones (lacking original functionality and perspective). The Ethereum blockchain has already become a basis of the new projects those days, but none of the blockchain projects could boast wide adoption in that time.
Another notable fact about the 2017 bull market is that basically big players in business and finance were not paying much attention to the possibility of implementation of the blockchain solutions. Of course, there were exclusions (the most vivid example is probably IBM), but comparing to the modern days it’s fair to say that in 2017 there was little interest to the world of crypto.
How the Situation is Different Nowadays?
1. People understand things better.
After making their own mistakes and enjoying fortune profits people became more aware of what to cryptocurrency is. When the media have slid from the rave over the skyrocketing prices to the skeptical stance after the Bitcoin price nosedive, many people on the Internet have started to read and write about the principles of trading, and the detailed knowledge of the blockchain. The amount of the educational courses about blockchain have increased, too.
It’s still not clear which factor in the sequence of the price dynamics of late 2017 was most significant — Bitcoin (Tether) whales manipulating the prices or the chaotic nature of trade performed by newbies, but probably one of the reasons of the relatively stable prices in 2018 was the fact that most traders learned when to buy and when to sell, and how much they should sell/buy. People learned how to tell if the coin is worthy or not (of course, not everyone learned these things, someone still buys high and sells low).
2. There is a new generation of promising blockchain projects.
These projects have way better scalability than Ethereum, Bitcoin, and Ripple, the decentralization is brought to the next level, and the speed of these networks is mighty. Of course, these projects will gain more following, adoption, and as a result a higher price.
For example, DENT and BAT are having millions of monthly users while Holochain, Elastos, QuarkChain, and Zilliqa are capable of processing over million transactions per second. The decentralization of these platforms is more real than the decentralization of any project that was on top in 2017. Holochain and QuarkChain are yet to be launched but it will happen this spring. Zilliqa and Elastos are fully operative.
There are many other relatively new ambitious projects that offer the speed of transactions that can compete with the “modern” banks, and tokens representing projects that can be used besides the finance sphere (supply chains, voting, healthcare, identification, file storage, music distribution, and so on and so forth). So now we are dealing with much more diverse market.
3. Fidelity & Bakkt will attract new investments to blockchain.
The financial giant existing on the market for over than 70 years Fidelity is allegedly going to launch its crypto custody business (Fidelity Digital Asset Services launch is scheduled for March 2019). Fidelity manages $2.6 trillion worth assets. Presence of such huge players on the market was something unreal in 2017. Will Fidelity participation attract more institutional investors? No doubt!
Don’t forget about the upcoming launch of Bakkt which was rescheduled several times in order to make sure that the service will work the best way. Bakkt is a Bitcoin futures trading platform that will provide a seamless global exchange/trade/investing operation in cryptocurrencies. It’s anticipated that with the start of Bakkt’s operation institutional investors will get a safe and efficient platform dealing with cryptocurrencies. Many analysts associate the launch of Bakkt with the start of the next bull run.
4. Cryptocurrency wallet will become a default option on many devices/in many apps.
We have already witnessed the release of HTC Exodus, the first blockchain-friednly smartphone in the universe that features Zion multicurrency-wallet by default. Samsung is going to release its Galaxy s10 having an inbuilt cryptocurrency wallet. It is interesting that Apple is not in hurry to do something like this. Finally, Starbucks is going to let its customers pay in crypto. It will be possible when the crypocurrency wallets will be added to the Starbucks application (the implementation of this feature is underway).
5. Tech giants and big business companies in general are working on blockchain solutions.
Nowadays the people how know how to spend money invest them into blockchain research, and creation of new blockchain-based services.
Such companies as IBM, Bosch, Microsoft, Oracle, Facebook, Amazon, Philips, ICE, JP Morgan, Disney, Daimler, etc are working with blockchain although it’s early to judge about the efficiency of these projects. The time will show. Nevertheless, in 2017 the blockchain technology had no such established support from the big business. That’s the difference. Even the banks are investing into blockchain solutions! Think of that.
6. Bitcoin block reward halving.
Take a look into the charts to see if there any pattern that took place during the past reward halvings.
As you can see the Bitcoin price performed a 300% increase year before the reward went from 50 to 25 BTC ($3 to $10), and then the price skyrocketed growing x20 during the next several month (the price went from $10 to $200).
It may seem incredible but the entire scenario had repeated itself with all accuracy the next time: the year before the reward halving (25 BTC to 12.5 BTC) the price increased on 300% going from $300 to $1,000. Then the following year after the halving of block reward the Bitcoin price went from $1,000 to $20,000.
If this trend appear to be strong, we will witness 300% decrease of the Bitcoin price in May of 2019 (probably the price will jump from $3,000 to $10,000) and then around May of 2021 we will see the price of Bitcoin reaching $200,000. Is it realistic? I’m not sure, but past trends promise us this scenario.
What Did We Learn?
If the bull run happens it’s gonna be very different from the previous one, and I believe that the facts listed in this article show the scale of the shift that happened in the world of cryptocurrencies since the days when a single Bitcoin could be sold for $20,000. The climate had changed and now blockchain is not a business of crypto enthusiasts anymore. I didn’t mention the governments working with blockchain solutions although there are vivid examples (you can read about the experience of Estonia). The banks, institutional investors, tech giants, big business — all these powers will define the next bull run.
