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Dan Owned, Kraken’s growth lead, reported that Bitcoin is now in a supercycle, which could enable the asset’s price to skyrocket to $1 million. Held explained the significance of this supercycle in a recent interview. People, he claims, have “lost faith” in existing financial institutions and governments since COVID-19, which is why the new Bitcoin period is “different:”
“The previous market cycles for Bitcoin, those speculative run-ups that we saw in 2011, 2013, and 2017. Those all were macro bull run and macro being the rest of the world. But then we had COVID hit, and when COVID hit, we had money printer go brrr”
According to Held, the pandemic was a catalyst to bring Bitcoin’s value proposition into a global perspective. It could perhaps be a reason why Bitcoin could even run “a semi-normal cycle,” that propels BTC price to “$200,000-$400,000.” However, Held predicted a 20% to 30 % percent dip could follow and claimed that this bear market may not be “as intense.”
Because this time around we have institutional buyers who buy and hodl.We have retail buyers who buy and hodl. People aren’t just in it for a speculative run anymore. People are buying it because they see Bitcoin’s value. So that’s where I think we might see a less intense bear market.
Moreover, Bitcoin may not have “a normal cycle” due to mass adoption. Now that there are many options to buy the asset, unlike “hard” times back in 2017 and 2013.
For instance, French economist, Marion Laboure predicted that future generations “may usher in mass adoption.” Deutsche Bank survey found that among millennials, cryptocurrencies are increasingly replacing cash and bank cards.
The economist concluded that, in the long run, “there would certainly be little room” for crypto to be used as a “widespread means of payment,” particularly because central banks are unlikely to give up their “monopolies.” Held shared this belief, stating that it is “really too early” for the “medium of exchange era,” in which users use Bitcoin for daily payments.
He said that in order for Bitcoin to become a means of trade, three conditions must be met: more people holding Bitcoin, a decrease in market uncertainty, and people’s continued conviction that the cryptocurrency is “true money.”
Kept estimated that it would take “a decade or two” for Bitcoin to be used as a means of trade. He elaborated:
“Long term, as Bitcoin becomes universally held by everyone to store value, then eventually they’re going to want to go spend it. And if the volatility subsides and there’s a huge network effect, let’s say like 50+ percent of the population owns it, then network effects start to kick in where other people want to receive it.”