Cryptocurrency bull market coming?
Last week’s court ruling on cryptocurrency Ripple (XRP) excited the digital asset industry, but this week has been relatively quiet.
Bitwise Asset Management is a cryptocurrency-focused firm with over $1 billion in assets under management. The company’s CEO, Hunter Horsley, who spoke about his expectations for the market in the coming years.
Will it rise further in the future?
In an interview with The Distributed Ledger, Horsley said that the crypto market could experience a bull market for at least two years.
Horsley said that the history of cryptocurrencies can be divided into several four-year cycles. He said, “Historically, Bitcoin and the crypto space will go up for three years and then go into a bear market, usually down 60 to 70 percent.”
Horsley said each bull market has a different catalyst. Bitcoin’s birth in 2009 triggered the first bull market in cryptocurrencies, which lasted until 2013, while ethereum’s launch in 2015 triggered a bull cycle that ended in 2018. From 2019 to 2021, different applications of blockchain drove crypto prices up, Horsley said.
According to CoinDesk, the conditions for the arrival of a bull market
In 2022, both bitcoin and ethereum fell more than 60 percent as the Federal Reserve hiked interest rates for more than a year.
This year is the first year of a new four-year cycle for cryptocurrencies, and digital assets are likely to move higher, Horsley said. If history is any guide, he said, cryptocurrencies will see a bull market in the next two to three years.
So far this year, the price of bitcoin has risen more than 80 percent to around $30,000, but it’s still down more than 50 percent from its 2021 all-time high, according to CoinDesk.
Horsley noted that mainstream adoption of Bitcoin and other digital assets could drive a cryptocurrency rally during this cycle. Horsley said, “Institutional mainstream counterparties, consumer use cases, and broader adoption of decentralized apps with user numbers ranging from 5 million to 10 million to 100 million could be catalysts for a bull market.”
To be sure, the cryptocurrency space is still relatively young, and past performance is not necessarily indicative of future results.
Digital Assets and U.S. Treasuries Make a Great Combination for Barbell Portfolios
Horsley said the sector could also benefit greatly from any progress in the transparency of cryptocurrency regulation in the United States. “The biggest barrier to cryptocurrency maturity and adoption over the last four or five years has been regulatory transparency.” As U.S. regulators tighten their grip on the industry, “it means that some projects and assets are going to be on the wrong side of the fence. You’re going to pay for that. But the industry as a whole will benefit.”
Crypto in the portfolio.
Ben Weiss, CEO of coinlip, said cryptocurrencies could be a good option for portfolios that employ a barbell strategy in the current market environment.
The barbell strategy refers to the concept of investing in two baskets of assets, one of which is very safe while the other holds speculative but potentially highly rewarding assets.
Weiss noted that while cryptocurrencies are volatile, Bitcoin’s returns this year and over the past 10 years have been much higher than most other major assets. This makes digital assets and U.S. Treasuries a great combination for barbell portfolios, Weiss said. Currently, digital assets and U.S. Treasuries are considered very safe, yielding more than 5 percent.
Instant crypto
Bitcoin is down 2.9 percent over the past seven days, trading at about $29,728 on Thursday, according to CoinDesk. Over the same period, ethereum fell 1.7 percent to about $1,885.
