How To Predict The Next Bitcoin Bull Market
Markets are cyclical by nature, but how can we predict when the next Bitcoin bull market will swing into action? Investors are looking for any indication that might signal a thaw in our ongoing crypto winter. After a meteoric rise that catapulted Bitcoin into the mainstream, a bear market has reigned for over 13 months and Bitcoin has lost nearly 80% of its value since peaking at around $20,000 apiece in December 2017.
To track the potential progress of the market, it’s best to follow investments of institutional money. An influx of institutional assets into the cryptosphere will be a key trigger for the next major bull market. Currently, blockchain technology adoption is exploding in the traditional financial sector and beyond. Growing corporate interest in crypto-adjacent platforms and services will boost investor perception of cryptocurrencies and create the necessary infrastructure to support widespread investment in digital coins.
So where exactly are we now with the process of institutional investment in cryptocurrencies, and what does that say about market recovery?
Institutional Investment Will Predict A Bitcoin Bull Market
Institutional money began trickling into cryptocurrency in early 2017. Since then, a cluster of private banks have started to offer crypto-asset products, and a few mutual funds created small crypto holdings. Blockchain ETF proposals are under consideration by centralized regulatory authorities, and crypto hedge funds are now in the mix.
But when it comes to dramatic market impact, Bitcoin futures trading is poised to be a game-changer.
Futures are basically contracts in which both parties agree to buy or sell an asset at a specified price on a specified date. Futures are utilized as risk management tools that protect portfolios by evening out the effects of assets that are particularly volatile. Although the actual volatility of Bitcoin has plummeted, a Bitcoin futures trading option may make institutional players more likely to invest in an asset that public perception has deemed unstable.
Several major Bitcoin futures trading platforms are on the horizon. Intercontinental Exchange, the parent company of the New York Stock Exchange, is preparing to launch a Bitcoin futures trading platform called Bakkt that will enable users to “store and spend digital assets simply, safely, and efficiently.” Bakkt is designed to offer an open-source, seamless global network connecting investors, merchants, and consumers.
A crypto-asset product backed by Intercontinental Exchange’s proven financial market and infrastructure will inject a profound dose of confidence into the world of crypto while simultaneously making those assets more accessible to individuals and larger entities. Bakkt and similar platforms will increase in popularity as demand grows for instant, cross-border transfers in an increasingly globalized world. This, in turn, will encourage further exploration of institutional investment in crypto and crypto-adjacent infrastructure, which will stimulate the next massive bull run.
A Bitcoin Bull Market Requires Momentum
The momentum of institutional support has exploded in recent months. NASDAQ has added indexes for Bitcoin and Ethereum, demonstrating that Wall Street is beginning to take cryptocurrency seriously as an asset, and it’s building the infrastructure to facilitate the trading of Bitcoin futures. Furthermore, Fidelity Investments announced Fidelity Digital Assets, which is a Bitcoin custody service. Fidelity manages 7.2 trillion dollars of assets for 27 million clients, and the commitment of this financial giant is a serious boon for the future of the cryptosphere.
As expected, crypto exchanges have been preparing for institutional adoption accordingly. Coinbase recently announced the rollout of their crypto asset management service called Coinbase Custody. Of the service, Coinbase states:
“In partnership with ETC, a SEC-registered broker-dealer and FINRA member, Coinbase Custody is proud to offer a service that couples Coinbase’s crypto asset security excellence with broker-dealer financial reporting expertise.”
Customers include institutions, hedge funds, ICOs, and cryptocurrency exchanges. This creates more avenues through which institutional players can funnel assets into the crypto ecosystem. This change will drive up the price of Bitcoin and digital coins across the board.
We’re not experiencing a bull run yet, but the increasing number of Bitcoin transactions and expanding exchange trading volume point are good signs for market recovery. Long-term positive inertia is accumulating, and Bitcoin has broken crucial price resistance markers, resulting in a decrease in pressure to sell.
Historically, market crashes of 70% or more have resulted in later cycle peaks that are 5.1 - 16.89 times higher than the previous cycle peak. While crypto investments always carry risk, now might be a good time to buy if you’re ready to roll the dice and sit tight. To buy digital coins without the hassle, visit a Pelicoin ATM near you today.