In its latest Insight report, the world’s largest digital asset manager, Grayscale Investments, compared the current bear market with other market cycles in crypto history to predict when the next bull run could arrive.
Crypto Market Cycles
Grayscale noted that, like traditional markets, the cryptocurrency space is cyclical, and the industry is currently experiencing what analysts have dubbed “the worst bear market” in its history.
The report estimated that crypto market cycles last an average of four years or approximately 1,275 days. The firm noted that bitcoin’s realized price, the sum of all purchase values divided by the number of BTC currently in circulation, could be effectively used to calculate the cycle timeline.
Grayscale pointed out that the realized price of bitcoin fell below the market price on June 13, 2022, signaling the start of the bear market.
The Best Buy Opportunity
Grayscale deduced that the current market cycle, which began in 2020, could last for less than 250 days (about eight months) if previous market cycles repeat themselves before it makes a comeback. However, the firm hinted that this point presents investors with the best buying opportunity.
The report also revealed that bitcoin’s move in the all-time range (ATH) last year was longer than in previous cycles. The company attributed this to the accelerated growth of the market over the past few years, adding that it has become easier for retail and institutional investors to invest in crypto assets, unlike previous market cycles.
“The 2020 cycle appears to have had a longer run in the ATH range with two prolonged peaks in contrast to the sharp rise and fall in prior cycles. This may have been due to the growing maturity of the crypto market that did not exist in previous cycles.”
Crypto still comes out stronger
In the final part of the report, Grayscale stated that no matter how severe each market cycle is, the crypto industry always emerges stronger at the end.
The firm added that each failure recorded in the space has helped shape the crypto industry and that the current cycle has provided users with “battled-tested” DeFi protocols.
“Despite price declines, liquidations and volatility, the crypto industry continues to build and innovate, pushing the boundaries of what is possible,” the company said.
