Many in the crypto industry today are hopeful that there is going to be another bull run. In reality, 2018 was bearish for the crypto market. Regulatory changes dropped the value of different cryptos over the last months. Some countries are crypto friendly while there are those that have a more hostile approach.
However, it is because of regulatory clarity that has brought the price of Bitcoin and other cryptocurrencies down. A lot of people in the industry believe that regulatory clarity is needed in order to bring in institutional investors at play. Institutional investors will not only bring fresh capital to the market, it can also help legitimize cryptocurrencies.
Down But Not Out?
Though Bitcoin price is down by 70% from its all-time high last mid-December, chief executive of Binance, Changpeng Zhao thinks that a Bitcoin bull run is about to happen “sooner or later”. He said that “Even if I don’t know what will catalyze a bitcoin bull run, I am certain it will happen…Sooner or later, something will trigger it”.
Changpeng Zhao mentioned that though Bitcoin is down by 90% from January in terms of trading volume, there are other aspects that make the crypto market healthy. He mentioned that “Compared to January (of 2018), we are probably down 90 percent. So we only have one-tenth of the trading volume compared to what we had in January. But, compared to like a year or two years ago, we’re still trading at huge volumes. Business is still okay, we are still profitable, and we are still a very healthy business”.
It is also worth mentioning that there has been a steady increase in the number of active users as well as Bitcoin deposits for the entire year. And also, Binance has been looking to target institutional investors. As Binance is laying the groundwork, it is waiting for the arrival of fresh capital from institutional investors just like everyone else.
It was already published in a Medium post in the past that Binance expects “a larger number of institutional investors to increase their allocation into this (cryptocurrency) asset class”.
What Can Trigger a Bull Run?
There are a number of things that could potentially trigger a bull run. If you are going to ask the ShapeShift chief executive Erik Voorhees, he believes that once the US debt reaches $20 trillion, it is going to be impossible to pay the debt back. And therefore, the US Central Bank will have to print more money and thus inflation.
This is a plausible scenario considering that JP Morgan believes that there will be a chance of having a 2020 financial crisis.
You also have the possibility of a Bitcoin ETF getting approved. The US Securities and Exchange Commission has a strong chance of approving the Bitcoin ETF application by VanEck and Solid X. If this happens, it can make it easier for institutional investors to participate in the market.
The direction of the market remains unknown at this point. We can only hope that things go up soon. In fact, a lot of people in today’s crypto market are anticipating. If you will look at the price of Bitcoin in recent months, it stayed at around $6,200 to $6,500 showing less volatility than your tech stocks.