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Crypto Bear Market Could Extend for Another 8 Months: Greyscale
Grayscale expects crypto bear market to last until around March 2023 Bitcoin could see another 5 to 6 months of downward or sideways movement, says a report Cryptocurrency markets have rallied over the past week, but digital asset manager Grayscale Investments believes the bear market could last another eight months. Cryptocurrencies, like traditional economic and financial markets, have changing cycles, Grayscale researchers Matt Maximo and Michael Zhao wrote in a report published on Monday. They compared the current state of the industry to previous bear market cycles and predicted that there will be another 250 days...
Crypto Bear Market Could Extend for Another 8 Months: Greyscale
- Grayscale geht davon aus, dass der Krypto-Bärenmarkt bis etwa März 2023 andauern wird
- Bitcoin könnte weitere 5 bis 6 Monate mit einer Abwärts- oder Seitwärtsbewegung erleben, heißt es in einem Bericht
Cryptocurrency markets have rallied over the past week, but digital asset manager Grayscale Investments believes the bear market could last another eight months.
Cryptocurrencies, like traditional economic and financial markets, have changing cycles, Grayscale researchers Matt Maximo and Michael Zhao wrote in a report published on Monday.
They compared the current state of the industry to previous bear market cycles and predicted that there could be another 250 days of “high-quality buying opportunities.”
Maximo and Zhao said the current bear market cycle began on June 13 when the “realized price” of Bitcoin (BTC) fell below the market price. The realized price is derived by calculating the sum of all BTC at their purchase price divided by the number of BTC in circulation. Bitcoin can expect another 5 to 6 months of bearish or sideways movement, they added.
The Grayscale researchers further noted that crypto market cycles take about 4 years from peak to trough. The current cycle - which began in 2020 - was about 1,198 days as of July 12th.
Compared to previous cycles, Bitcoin took the longest (952 days) to peak this time, implying that the next rally to record highs will take even longer, according to Maximo and Zhao.
“The 2020 cycle appears to have had a prolonged run in the ATH (all-time high) region with two extended peaks, in contrast to the sharp rise and fall in previous cycles,” they wrote. “This could be due to the growing maturity of the crypto market, which was not present in previous cycles.”
2020 market cycle a “Story of Leverage”
According to Grayscale, government spending in response to the coronavirus pandemic has prompted investors to start leveraging, or using debt, to trade. But their positions began to unravel after the Federal Reserve raised interest rates to combat inflation, she noted.
The report pointed to the collapse of stablecoin TerraUSD (UST), the delay in the Ethereum merger, and a lack of transparency among centralized finance lenders and hedge funds as reasons that exacerbated the market sell-off. And yet, Grayscale believes that each market cycle will make the asset class stronger.
“The price of digital assets represents only one part of the broader ecosystem developing in the crypto industry,” the researchers wrote.
“While the price of Bitcoin has fluctuated alongside traditional financial assets during market uncertainty, the underlying network continues to function as planned and is on track to process nearly $18 trillion in value this year, up from $13 trillion in 2021.”
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The post-crypto bear market may drag on for another 8 months: Grayscale is not financial advice.