Most people who follow crypto would probably agree that we are either entering or already in the early innings of the next crypto bull cycle. Just as prior cycles took prices to all time highs over the span of 1-2 years — though with plenty of volatility — I expect much the same behavior this cycle, too.
Like prior cycles, this one seems to sync with Bitcoin’s 4-year halving. Like prior cycles, it also comes after a prolonged and painful bear market full of implosions, bankruptcies, scammers, government regs, and plenty of Twitter fights.
If you’re on Twitter, the dominant explanation for why the worm has turned is the anticipated approval of America’s first Bitcoin spot ETF, specifically Blackrock’s application.
There are other catalysts too such as:
-the anticipated Bitcoin halving cutting new bitcoin issuance from 6.25 per block to 3.125 per block in April next year
-A pause and potential reversal of the Fed’s rate hiking cycle (and stealth QE or as Michael Howell puts it, “quantitative support” 🙄)
-The conclusion of SBF’s (first) criminal trial and the steady forgetting of the FTX debacle (and the Luna debacle and the Celsius debacle and on)
-High and sustained global inflation causing fiat currency holders around the world to look for alternative stores of value
-The crash of US Treasury prices and the prospect of “higher for longer” interest rates causing fixed income investors to seek alternatives
I consider the above as “immediate” catalysts in the sense that if any of them were to occur in a sustained and significant way, it would probably lead to a significant and broad pump in crypto prices. Some of the above are already “priced in” to varying degrees. But not completely, and not to the degree that I anticipate they will materialize in 2024 and 2025.
In addition to the imminent catalysts, I find it interesting to speculate about potential knock on effects, the “unexpected catalysts” per the title, the second order effects that follow on from the first wave.
Just as the rise of Uber (initial catalyst) led to the downstream effects of (a) the decline of the regulated yellow cab industry, (b) the crash in NYC taxi medallion prices, and (c) the rise of on-demand apps for everything from scooters to house cleaners.
These unexpected catalyst and downstream effects are far less likely to happen, but when they do, they can generate enormous volatility in outcomes because they are almost by definition SURPRISES and thus NOT PRICED IN.
I believe the immediate catalysts — and more that I missed — will by themselves propel Bitcoin past its former all time high ($69K USD). You can expect the rest of crypto to catch up as well (just not your shitcoin).
But it’s those unexpected catalysts / un-priced-in effects that could push cryptocurrencies to significant new highs in 2024 and 2025. Though I don’t put much stock in price predictions, my starting assumption for price peak in this fast approaching cycle is $150K Bitcoin and $10K Ethereum, with Ethereum flippening Bitcoin (as I wrote about before) briefly, and that itself also being a second order effect.
So below are some very speculative potentially surprising ideas that could catalyze the late and crazy parts of the bull market:
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Microstrategy causes corporations and corporate titans to fomo in
As Microstrategy’s Bitcoin bags explode in value (even at $36K Bitcoin, MSTR is already $1B in profit), leading to record corporate profits, a soaring stock price, and new levels of media notoriety for Michael Saylor, other small and medium tier companies — particularly those in adjacent industries from energy to tech to finance — will adopt a crypto reserve strategy. You could see billionaire tech titans like Masayoshi Son fomo in. Bitcoin will benefit most. Ethereum may surprise too
El Salvador causes nation states to fomo in
The same effect could happen to El Salvador, which becomes celebrated as a new beacon of financial sovereignty and emerging market wealth. President Bukele is feted by innovative politicians (I hope this is not an oxymoron) and small sovereign states, particularly in the Global South, and a race begins for nation states and central banks to buy Bitcoin and other blue chip cryptos. Investing heavily in bitcoin mining is also an indirect approach (eg, Oman, UAE, Bhutan). It’s possible G7 / developed states could also FOMO in, but I think this more likely in the next cycle (circa 2027-2028)
Bitcoin ETF’s success leads to a laundry list of other token ETFs
The Bitcoin spot ETF, after a slow launch, will steadily become Wall Street’s new darling, causing financial advisors and institutions to fomo in, leading to a slew of applications for other crypto ETFs starting with Ethereum. Though most applications could be rejected or at least delayed, this solidifies crypto’s position within tradfi, and tradfi is coming with their big accounts and clever financialization.
Ethereum becomes known as the deflationary currency and the Internet bond
As crypto usage rises (always correlated with bull markets), Ethereum becomes significantly deflationary (it already is, just more so), and along with its anticipated spot ETF approval, this is the cycle where Ethereum will birth its new reputation as (1) the “Internet bond” (first bearer digital asset with meaningful yield) and (2) the first deflationary asset to go alongside Bitcoin’s positioning as the first fixed-supply asset
Bitcoin beating gold becomes the next Schelling point
As Bitcoin easily passes $100K, everyone will turn their attention to what’s next, and what’s next is beating gold. Depending on the estimate you use, that easily puts Bitcoin around $400-500K, which I don’t expect to happen in this cycle… but it could. And it’s what people will talk about in the late bull. People need rallying points and gold has always been a big bullseye
Ethereum will flippen Bitcoin — just briefly
Just as Bitcoin’s main competitor is gold, Ethereum’s main competitor is Bitcoin. I support both and believe a rising tide lifts all boats. In the last bull, Ethereum peaked around 50% of Bitcoin’s value (market cap), and I expect that 50% will be far surpassed this cycle. As this happens, everyone will begin talking about Ethereum “flippening” Bitcoin, and the possibility is not priced in. Though I expect any market cap flippening to be short lived this cycle, but possibly a permanent fixture by the next. I wrote more about that prospect here.
Memecoin mania will return with a vengeance, and MSM will go crazy
I expect memecoin mania to return, despite less global liquidity and a high rates environment. And it will be larger and more degenerate, and no one will expect it. The first $100B memecoin. Maybe even a memecoin billionaire. The mainstream media’s shock and disgust will ironically pour fuel on flame. Elon’s never one to miss a press party, and he will finally launch his own token, somehow justifying the move by claiming synergy with Twitter/X and Grok AI.
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That’s it for now. It’s a very incomplete list, but if even a couple of the above surprises were to happen, we could be in for a wild(er) ride. I’ll add more as I think of them or you can yell at me on Twitter.
You could argue there will be plenty of negative surprises and unforeseen headwinds, too, but that’s the thing about bull markets — no one really cares, and everyone just wants to greed while greeding is good. The bad news and the corruption and the new wave of scams will accumulate and build and then push us into the next bear in 2025-2026 :)