According to Huobi co-founder, no Bitcoin bull run runs until the end of 2024
Huobi co-founder Du Jun provided a slightly bearish forecast for the digital asset and bitcoin markets.
In an interview with CNBC over the weekend, Jun said that given past market cycles, there won’t be another bull market until late 2024 or early 2025.
“We are currently in the early stages of a bear market. According to this cycle, we cannot see the next Bitcoin bull market until late 2024 – early 2025.”
All about the Bitcoin halving
Jun believes all Bitcoin market cycles are tied to the halving event. The price rallied strongly, starting a fresh bull run in previous cycles in the year following Bitcoin’s halving. The next wave is expected to happen on May 4, 2024 in 803 days. So, if history rhymes, the end of 2024 will be the time to kickstart the crypto market.
The block reward halving for miners will be reduced from the current 6.25 BTC to 3.125 BTC per block in the next. After the previous halving (which took place in May 2020) until October and November of the same year, there was very little market activity. The previous all-time high was broken in mid-December.
However, the current market cycle differs from the previous ones as there are more influencing factors, with the participation of institutional investors and the products of portfolio swaps. Jun confirms it’s not as predictable as it used to be:
“It’s really difficult to make an accurate prediction because there are so many other factors that can also affect the market – such as geopolitical issues including war or the recent Covid…”
As Bitcoin Magazine reported, Ethereum co-founder Vitalik Buterin also spoke about the bear market, saying that many developers would even welcome another crypto winter. His comments were made at the ETHDenver event, which took place on February 20th.
“People who are deeply into crypto and building things in particular, many of them are embracing the bear market.”
Crypto markets retreat
Crypto markets are currently down about 38% from their mid-November peak, and they could fall further if earlier bear markets continue. Bitcoin’s Fear and Greed Index is still registering extreme anxiety at 25.
At the time of writing, most major tokens are trading consistently on the day, and the total capitalization is around $1.8 trillion, according to CoinGecko.
Bitcoin stays below $40,000 and slides towards $38,456.
Source: TradingView
Short term prognosis
Bitcoin could align with growth stocks and start a new bull run in the second half of this year.
“After the market adjusts to the pace of Fed rate hikes, stocks and bitcoin will continue to rise, meaning we should see strong performance from both in the second half of 2022,” said crypto researcher Robbie Liu financial services provider Babel Finance said in an email.
“According to Goldman Sachs, growth stocks have historically been the worst-performing sector in the three months before and after the first rate hike,” Liu added, noting that the cryptocurrency’s strong correlation with legacy risky assets is sensitive to growth. According to data analytics firm IntoTheBlock, Bitcoin’s correlation to US stocks recently hit a record high of over 0.75.
Liu’s data-driven view contradicts a burgeoning narrative in the crypto community that bitcoin could start to rise shortly after the Federal Reserve’s (Fed) expected rate hike in March as mentioned above.
Market expectations can come from two things: The leading cryptocurrency is down 40% in 3 months, mainly due to concerns about a rate hike by the Fed. Second, as First Mover Americas noted Friday, the US dollar tends to peak with the first rate hike. A weak dollar is generally considered bullish for bitcoin.
However, growth stocks suggest the opposite.
“Given the current strong correlation between BTC and growth stocks, particularly the synced downtrend of the two assets since December, we believe Bitcoin may have a difficult time moving higher in the 3 months following the rate rally,” Liu noted.
This chart shows that value stocks tend to outperform growth stocks three months before and after the Fed’s rate-hike cycle begins. Value stocks are companies that are currently trading below their intrinsic value and are typically legitimate companies. Growth stocks tend to be newer industries with high growth prospects and trade at relatively high prices.
While Bitcoin is viewed as digital gold by some in the crypto community, it is also an emerging technology that is sensitive to the flow of centralized liquidity.
According to Reuters, some Wall Street banks expect the Fed to start the tightening cycle with a rate hike of at least 25 basis points in March, followed by a 6/4 percentage point hike by the end of the year.
Bitcoin is likely to rally from European and US stock futures on reports of a possible summit between US President Joe Biden and Russian President Vladimir Putin over Ukraine.
Join CoinCu Telegram to keep track of news: https://t.me/coincunews
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According to Huobi co-founder, no Bitcoin bull run runs until the end of 2024
Huobi co-founder Du Jun provided a slightly bearish forecast for the digital asset and bitcoin markets.
In an interview with CNBC over the weekend, Jun said that given past market cycles, there won’t be another bull market until late 2024 or early 2025.
“We are currently in the early stages of a bear market. According to this cycle, we cannot see the next Bitcoin bull market until late 2024 – early 2025.”
All about the Bitcoin halving
Jun believes all Bitcoin market cycles are tied to the halving event. The price rallied strongly, starting a fresh bull run in previous cycles in the year following Bitcoin’s halving. The next wave is expected to happen on May 4, 2024 in 803 days. So, if history rhymes, the end of 2024 will be the time to kickstart the crypto market.
The block reward halving for miners will be reduced from the current 6.25 BTC to 3.125 BTC per block in the next. After the previous halving (which took place in May 2020) until October and November of the same year, there was very little market activity. The previous all-time high was broken in mid-December.
However, the current market cycle differs from the previous ones as there are more influencing factors, with the participation of institutional investors and the products of portfolio swaps. Jun confirms it’s not as predictable as it used to be:
“It’s really difficult to make an accurate prediction because there are so many other factors that can also affect the market – such as geopolitical issues including war or the recent Covid…”
As Bitcoin Magazine reported, Ethereum co-founder Vitalik Buterin also spoke about the bear market, saying that many developers would even welcome another crypto winter. His comments were made at the ETHDenver event, which took place on February 20th.
“People who are deeply into crypto and building things in particular, many of them are embracing the bear market.”
Crypto markets retreat
Crypto markets are currently down about 38% from their mid-November peak, and they could fall further if earlier bear markets continue. Bitcoin’s Fear and Greed Index is still registering extreme anxiety at 25.
At the time of writing, most major tokens are trading consistently on the day, and the total capitalization is around $1.8 trillion, according to CoinGecko.
Bitcoin stays below $40,000 and slides towards $38,456.
Source: TradingView
Short term prognosis
Bitcoin could align with growth stocks and start a new bull run in the second half of this year.
“After the market adjusts to the pace of Fed rate hikes, stocks and bitcoin will continue to rise, meaning we should see strong performance from both in the second half of 2022,” said crypto researcher Robbie Liu financial services provider Babel Finance said in an email.
“According to Goldman Sachs, growth stocks have historically been the worst-performing sector in the three months before and after the first rate hike,” Liu added, noting that the cryptocurrency’s strong correlation with legacy risky assets is sensitive to growth. According to data analytics firm IntoTheBlock, Bitcoin’s correlation to US stocks recently hit a record high of over 0.75.
Liu’s data-driven view contradicts a burgeoning narrative in the crypto community that bitcoin could start to rise shortly after the Federal Reserve’s (Fed) expected rate hike in March as mentioned above.
Market expectations can come from two things: The leading cryptocurrency is down 40% in 3 months, mainly due to concerns about a rate hike by the Fed. Second, as First Mover Americas noted Friday, the US dollar tends to peak with the first rate hike. A weak dollar is generally considered bullish for bitcoin.
However, growth stocks suggest the opposite.
“Given the current strong correlation between BTC and growth stocks, particularly the synced downtrend of the two assets since December, we believe Bitcoin may have a difficult time moving higher in the 3 months following the rate rally,” Liu noted.
This chart shows that value stocks tend to outperform growth stocks three months before and after the Fed’s rate-hike cycle begins. Value stocks are companies that are currently trading below their intrinsic value and are typically legitimate companies. Growth stocks tend to be newer industries with high growth prospects and trade at relatively high prices.
While Bitcoin is viewed as digital gold by some in the crypto community, it is also an emerging technology that is sensitive to the flow of centralized liquidity.
According to Reuters, some Wall Street banks expect the Fed to start the tightening cycle with a rate hike of at least 25 basis points in March, followed by a 6/4 percentage point hike by the end of the year.
Bitcoin is likely to rally from European and US stock futures on reports of a possible summit between US President Joe Biden and Russian President Vladimir Putin over Ukraine.
Join CoinCu Telegram to keep track of news: https://t.me/coincunews
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