Bitcoin Bull Run – What Stands in the Way?

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Almost everyone in the cryptocurrency world is in agreement that, after nearly three years of waiting, Bitcoin is finally back in bull market territory. This has led to a rash of speculation about what happens from here and where the price could be in a year or two years, but these people are forgetting that there are still some huge sticking points along the way, and a break of all time highs is by no means guaranteed any time soon.

We look at the three most likely barriers to a Bitcoin bull run in the months and years ahead:

Strong U.S. Dollar Index

As we have noted before, there is a negative correlation between the U.S. Dollar Index and Bitcoin. Of course the two could both rise (and fall) together and have done in the past, but since 2017 the trend has been that when the value of the dollar has risen, Bitcoin’s value has dropped.

The U.S. Dollar Index is in a precarious position right now having been in a six-month downtrend, and there’s only so much further it can fall before a reversal.

Institutional Manipulation

Up until 2017, Bitcoin was an almost entirely retail-driven asset, which is why you can see natural market cycles up until that point. With more and more institutions getting on board however, media manipulation as well as price manipulation has become a more tangible threat.

We saw this with the bursting of the 2017 Bitcoin bubble by the CFTC when they allowed Bitcoin futures to launch in December that year, and with the recent revelations that JPMorgan bankers manipulated the metals market for years to keep prices down, what’s to say that same thing isn’t going on right now with Bitcoin?

Tough Regulations

The last few years have seen the cryptocurrency markets being regulated like never before, and you can bet that those regulators are just getting started. Many (if not all) governments don’t like Bitcoin for obvious reasons, and the U.S. government in particular has issued warnings that heavy new regulations are imminent for the nascent market.

Should a country like the U.S. announce hugely burdensome regulations in the next year or two, the attractiveness of owning Bitcoin might be massively devalued, with the obvious impact on the markets.

Cautious Optimism on Bitcoin Bull Run

These three potential pitfalls don’t even include black swan events like a financial crash or a massive security flaw which alone have the power to cripple the market at any time. However, these events are less predictable (and less likely) than the three discussed here, which are very real and perhaps even happening at the moment.

So while it is of course a good idea to hold some Bitcoin (not financial advice, just our opinion), we would always urge a little caution when you dream of your lime green lambo.