Why the Next Crypto Bull Run Will be Different Than The Last

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  • The 2015-17 crypto bull run brought the ecosystem into the headlines, but its swift collapse frightened many away
  • In the years since this run, the ecosystem has undergone a huge shift, with appreciation for the asset class changing for the positive
  • What are the key differences now, and how will they play out as the market cycle develops?

The crypto bull run of 2015-2017 brought Bitcoin and its brethren into the mainstream for the first time, but in doing so it burned many fingers and frightened many off the space. With a new market cycle upon us, what is different this time round and how will it play out as the market cycle develops?

Institutional demand

Institutional demand of Bitcoin is in a very different place than it was in 2017. There were some institutional buyers back then, but these were mainly crypto-first companies like Grayscale. In 2021 we will have PayPal and Cash App, who between them are already hoovering up all the freshly mined Bitcoin around, in addition to any other institutions that join the race.

As Pantera Capital said in their most recent monthly report, this will force other institutional buyers into buying Bitcoin at market or near-market prices, giving the Bitcoin price considerable and consistent buying pressure. This will, in turn, drive a crypto bull run for the entire market.

Institutions are also known to be buying up other cryptocurrencies such as Ethereum for the potential to earn money through Ethereum 2.0’s staking mechanism, giving it a similar edge to Bitcoin in that regard.

Better On-ramps

The crypto market in 2017 was marred by few poor quality on-ramps who couldn’t cope with demand. In 2021 we will have an unprecedented amount of better quality on-ramps and exchanges, with mainstream names like PayPal also offering a route for those who like to stick to names they trust.

Registering with these platforms is also much easier than it was in 2017, as is the process of buying cryptocurrency through them. All this leads to a much more user-friendly experience, easing the flow of newcomers into the space.

Better Understood

The cryptocurrency universe was still seen as mysterious and dangerous in 2017. Three years on and there is of course a huge swathe of the population whose opinion on it hasn’t changed (or may even have worsened) since 2017, but equally the explosion of cryptocurrency onto the scene let the genie out of the bottle.

While adoption may not have followed, the names associated with the cryptocurrency sector, most notably Bitcoin and to some extent Ethereum, are better known than ever before, leading to a greater interest in exploring them. In short, the fear and mistrust about cryptocurrencies has dissipated, particularly among institutional investors, which can only boost its chances of success, both in the coming crypto bull market and beyond.

Growth Could Stem Crypto Bull Run Volatility

As we can see, there are huge differences between 2015-17 and now, all of which should lead to a healthier, more sustained crypto bull run compared to the sharp peak and trough that we saw in 2017. Of course the cryptocurrency markets will remain volatile, but it will be interesting to see if the maturation of the market tames this volatility during its peak times.