Is crypto winter finally coming to an end?

by Arthur · April 25, 2023

After nearly a year of decline, crypto markets appear to be on the rise again. Analysts are predicting skyrocketing prices as well, and Bitcoin is once again the poster boy for the resurgence. Is this the end of the crypto winter of discontent? Mint examines:

What are the predictions?

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In a note published on Monday, Standard Chartered analyst Geoff Kendrick wrote that Bitcoin could potentially reach $100,000 by the end of 2024. He noted that the crisis in the traditional banking sector, including the Silicon Valley Bank crisis, has given impetus to Bitcoin and the crypto winter is finally over. He also added that Europe’s regulation of crypto “should provide a tailwind” for Bitcoin. This comes a few weeks after JPMorgan predicted an upward movement in Bitcoin’s price due to a technical change in the cryptocurrency’s underlying blockchain, called a “halving,” that makes it more expensive to produce.

Are these the only predictions?

No. While Standard Chartered and JPMorgan’s analysis may have caught people’s attention, Bitcoin has been growing throughout 2023. In fact, the world’s most valuable cryptocurrency broke the $30,000 mark earlier this month for the first time in ten months. Although it has fallen since then, experts have noted that the fall of Silicon Valley Bank and other crises among US banks have confirmed enthusiasts’ belief that the cryptosystem is not influenced or controlled by central authorities. However, this is not necessarily true, as crypto markets have also been known to coincide with traditional stock markets in the past.

What does “halving” have to do with it?

Bitcoin’s “halving” happens every four years. This increases the scarcity of Bitcoin, which in turn increases the price. Bitcoin prices have typically spiked around this event, with the next halving occurring in about a year. The three halving events to date have all corresponded to an increase in Bitcoin’s price, with the first occurring at a time when the price rose by nearly 100 times.

Could there be other reasons for this increase?

Yes. For example, the Ethereum blockchain was invented in 2015, about a year before Bitcoin’s third halving. This gave rise to “decentralized apps”, or dapps – apps built on decentralized blockchains – which have fueled the crypto ecosystem more than anything else in its short history. Dapps benefited these digital currencies, leading to Ether becoming the second most valuable crypto in the world. Other reasons include the formation of large crypto exchanges, and large banks taking notice of the industry.

Is this a possible bull run?

While some experts expect a bull run for crypto once again, they don’t expect it to last forever. The crypto market has gone through several bull runs in its short history, and they are always followed by a bear phase. No one expects volatility in the crypto markets to magically disappear, and while the industry cites government regulation as a welcome move, some could still harm the industry and investors’ ability to invest in digital assets. Finally, a bull run does not negate the possibilities of fraud, as seen in the case of FTX.