A Sustained Bull Run May Replace the Latest Crypto Winter

There have been multiple crypto winters in the past. The most recent one started in late 2021, when the price of Bitcoin surged to a record high of more than $68,000. By December 2022, Bitcoin’s value was $17,000, which represents a 75% decline. There was some optimism that the cryptocurrency market would rise in 2023, but it only resulted in the elongation of the crypto winter, altering many people’s views towards cryptocurrency. Bitcoin started 2024 with good news. On January 10, the SEC approved the marketing of Bitcoin-related assets offered on traditional exchanges to be traded as ETFs. The purchase of Bitcoin is one click away for the average investor, who is more likely to place their savings in the stock market. 

Positive signs indicate that the latest crypto winter will soon be over. Bitcoin’s next halving, which is scheduled for mid-to-late April, could spark a new bull run stronger than the one in 2021 not only because of the price but also because of institutional involvement. Nonetheless, some industry professionals argue that the crypto winter won’t be over until Ethereum ETFs are approved for sale in the U.S. markets. The SEC has once again postponed its decision regarding applications from BlackRock and Fidelity Investments. It can defer its resolution three times before making a final ruling. 

Bitcoin Bounced Back to Its Record High, Closing Above $69,000 

Spot Bitcoin ETFs started trading earlier this year. The SEC put an end to the cryptocurrency drama by approving the listing and trading of 11 spot ETP shares, which led to an evident upswing in the market. Individuals no longer have to open accounts on cryptocurrency exchanges or obtain a digital wallet to store their funds. All they have to do is log into a stock trading website and click “buy”. The ETF approvals are bound to generate improved trading volumes and bring liquidity to the cryptocurrency market. Investors and enthusiasts hope the approval of a spot Bitcoin ETF will open the door for a similar investment vehicle for Ethereum. 

The Bitcoin price today briefly hit $69,000, overcoming its previous record set in November 2021. According to research firm Chainanalysis, this indicates institutional maturity, a development indiscernible during the last bull runs. More exactly, people are starting to trust the cryptocurrency market and believe its infrastructure is improving, so risk appetite has soared in the past couple of weeks, fueling the fear of missing out. Bitcoin has climbed more than 50 percent since the beginning of the year, which denotes a strong vote of confidence from the venture capitalist community. It won’t compete on equal terms with the dollar or euro anytime soon, but its position as a store of value has been reinforced. 

How Is a Crypto Winter Different from A Bear Market? 

For a considerable amount of time, Bitcoin has been only going up, turning the crypto winter into a bad dream. Investors overall are confident that a bull run will break out in 2024, already buying into the rumor and waiting to sell regardless of what the news is. The phrase crypto winter has been developed to describe a poorly performing cryptocurrency market characterized by decreased institutional interest, falling token prices, and less trading activity. The term was first used in 2018 when Bitcoin had its worst-performing year ever, and the cryptocurrency market experienced a long period of falling prices and reduced investors interest.  

A crypto winter is much like a bear market, but it’s not the same thing. They’re not necessarily correlated. When a crypto winter strikes, it affects the cryptocurrency market exclusively, its ferocity and scale leading to more of an ice age. With stocks, you can expect prices to drop at least 20 percent from a recent high. Prices are determined by market forces and investors resort to fundamental analysis and technical analysis to determine target prices. The end of the crypto winter means that cash is spent faster than it’s coming in. Needless to say, you shouldn’t mindlessly follow what you read in the newspapers. 

The Bitcoin Blockchain Is More Secure Now Than It’s Been During Former Halvings 

Regardless of your background, anyone can benefit from grasping the core principles and potential of blockchain technology. The Bitcoin blockchain is a shared public ledger where a consensus method is used to validate transactions among peers. The integrity and the chronological order of the blockchain are guaranteed with cryptography and hashing. Hashing is a vital component of the Proof of Work consensus algorithm, as it provides security and stability to the network. As highlighted by Adam Swick, CGO at Bitcoin mining company Marathon Digital Holdings, the blockchain is more secure than ever because the hashrate has gone up to a record high of 600 million terahashes per second in February. 

The hashrate is calculated by using the current Bitcoin difficulty, the defined block time, and the average block time of the last number of blocks. It increases as more machines are devoted by legitimate miners to find the next block, meaning that the network’s computational power is high, and it’s difficult, if not impossible, for threat actors to interfere with the network. To put it briefly, a substantial hash rate leads to better overall security and ensures the stability of the Bitcoin blockchain. Probably the most common misconception is that the halving event will cause a decrease in Bitcoin network security. It actually strengthens security over time. 

Conclusion 

Irrespective of what will happen this time, there’s no doubt that Bitcoin halving is one of the most important events in the cryptocurrency calendar. The total supply remains capped at 21 million, which is why Bitcoin is a deflationary asset; its purchasing power doesn’t decline with time. The surge in Bitcoin’s price pre-halving is typically followed by sustained growth in the upcoming months, strengthening Bitcoin’s reputation as a store of value and hedge against inflation. In case you’re wondering if there’s anything you need to do to prepare for the Bitcoin halving, the answer is no. Just stay informed about the event’s timing and potential market impact.