Crypto markets could reach new heights with these macro factors

Crypto markets have achieved their greatest levels in over two years, with total capitalization approaching US$2 trillion. They have been boosted by Bitcoin's recent peak of over US$50,000, which has provided experts with plenty of fuel for conjecture about why things are different this time for a crypto bull run.

Crypto market capitalization has reached US$1.97 trillion, the largest amount since April 2022, when things looked considerably different.

Fundamentals for the Crypto Market's Bull Run

Back then, crypto markets had fallen from their US$3 trillion top in November 2021 and were in the bear market zone. This time, they are emerging from a two-year crypto winter, and some basic elements have not been witnessed in past cycles.

On February 12, Syncracy Capital co-founder Daniel Cheung projected a strong likelihood this bull cycle will conclude with,

"The largest in terms of market cap creation and longer in duration than expected."

It's the first time the crypto bull market has coincided with the commencement of a Fed easing cycle, he said. After two years of rapid rate rises, the US central bank is trying to keep inflation low and interest rates low.

Furthermore, he stated that until there is a significant macro shock, crypto markets would continue in a "buy the dip" mode. There has also been no retail interest, indicating that things are still in their early stages. BeInCrypto published research this week on the levels of social engagement and search activity for Bitcoin and cryptocurrency throughout the bear market.

Additionally, crypto ETFs offer "sustained bids into the asset class." He added,

"We're starting to see many large TradFi investment firms looking beyond the majors."

This year has also seen a slew of new storylines and subsectors emerge in the cryptocurrency space. These include the buzz around artificial intelligence, real-world asset tokenization, restacking, and so on. Cheung stated that these circumstances may

"Help drive sustained pockets of wealth creation amongst investors in the asset class."

Finally, he projected a more constructive regulatory posture once BlackRock entered the ecosystem. Furthermore, many of the bad guys were eliminated in the previous round.

Bitcoin back at US$50,000 is different

On February 13, Bitcoiner "Mitchell" explained why Bitcoin at US$50,000 is different this time. The asset last traded above US$50,000 in December 2021.

He stated that more than half of the BTC supply was "held by lettuce hands," most likely alluding to retail traders who frequently panic purchase and sell.

Furthermore, FTX was still operational, as was the Terra/Luna programme, which finally failed. He also said that it happened during the quickest interest rate rises in US history.

This time is significantly different, with 70% of supplies "held by diamond hands" and passive Wall Street bids via ETFs. Bitcoin is also about to be halved in a few months, and interest rates will be slashed later this year.

Retail FOMO has yet to develop, as institutions quietly stockpile. As a result, the price will only go in one direction as this super cycle unfolds over the next year or two.