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Posted on Mar 8th, 2023

3 Things That Could Cause the Next Crypto Bull Market


Haan Palcu-Chang

Crypto Specialist

We’re currently in the middle of a particularly unpleasant crypto bear market. Bear markets, like anything else, though, don’t last forever. And while it’s impossible to say when the next crypto bull run will happen, we can give you a good idea of the things that will help drive it. In this article, we take a closer look into three factors we think will bring on the next crypto bull market.

Key takeaways

  • Supply-and-demand dynamics brought on by the upcoming 2024 Bitcoin halving and increased global adoption could spark the next crypto bull run.
  • Cooling inflation and less hawkish central banks policies would create a favourable environment for renewed interest in risk assets, including the digital asset space.
  • Economic sustainability and cash flow generation will be key markers to look out for when evaluating the health of the next bull run.

Upcoming Bitcoin halving’s effect on supply and demand

Scarcity and desirability tend to drive an asset’s price higher. Understanding the supply dynamics of Bitcoin—whose price action largely informs the movement of the crypto market as a whole—can help you make sense of why and how prices go up when they do. That’s why we believe the upcoming Bitcoin halving, expected to take place in March 2024, might act as a potential trigger for the next crypto bull run.

Bitcoin was designed to have a maximum supply of 21 million tokens. However, this supply of 21 million was not dumped into the market upon Bitcoin’s inception in 2011.

Bitcoins gradually come into circulation through the process of "mining." As a brief refresher, bitcoin mining refers to the act of using powerful computers to help verify and record transactions on the Bitcoin blockchain. When a “miner” successfully records a large group of these transactions, they are rewarded with some bitcoin.

Every four years—and this is where the question of supply and demand starts coming into focus—the rewards are halved. In other words, this means that the amount of new bitcoin that enters the marketplace is reduced by 50% every four years.

The halving in and of itself doesn’t necessarily equate to a Bitcoin bull run. When we zoom out and look at it from the context of an increasing Bitcoin user base, though, the story becomes more interesting.

As we can see from the chart below, users of the Bitcoin network have steadily increased since Bitcoin went online in 2011. (1)

Bitcoin Adoption Rate

This increased network demand coupled with Bitcoin’s halving mechanism has meant that without fail, every time there has been a Bitcoin halving, there has also been a corresponding period of sustained upward price action for Bitcoin.

Bitcoin Halving History

Though history is never a crystal ball into the future, it can help us make educated guesses about what is to come. With this in mind, we can view the upcoming Bitcoin halving in 2024 as strong potential catalyst for the next bull run so long as usership of the Bitcoin network continues to increase as well.

Cooling inflation and interest rates

Soaring inflation and rising interest rates have been the dominant themes in the macro-economic landscape since the beginning of 2022. Similar to other higher risk assets such as technology, Bitcoin, and cryptocurrencies in general, have been impacted as market appetite for risk assets has decreased.

However, as inflation cools off and central banks become less aggressive on interest rate hikes, we should see the economic conditions return for sustained capital inflows back into risk assets, such as crypto.

As Nick Kuriya, Head of Crypto at Purpose Unlimited puts it: “Central banks are still battling persistent inflation, but at some point, those pressures will ease. What we’ve seen in early 2023 is that any indication of softening inflation has usually been met by strong gains in tech and crypto asset prices.”

An additional note to make here is that, although interest rates will likely come down from current levels, it’s unlikely they will return to the rock-bottom rates we saw during the pandemic. This has some interesting implications.

In a recent macro-economic report by our team, we highlighted that over the last 47 years, every period in which inflation was at or over 3%, value equities outperformed by +32 bps. Though these statistics were drawn specifically from equity investing statistics, we believe that this trend will be mirrored in the digital asset space, where prevailing macro-economic conditions will direct the flow of capital to blockchains and protocols with proven track records, active communities, and strong balance sheets. This likely emphasis on value in the next bull run is something we will delve deeper into in the next section of this article.

Inflation, interest rates, and growing economy

Before we go on, there is one caveat to make regarding these points on inflation. We have to acknowledge that this view is firmly rooted in the socio-economic realities of stable, developed countries. We have actually seen a continued uptick in crypto adoption throughout this bear market in countries going through currency crises such Lebanon, where crypto adoption has risen 120% year-over-year even throughout 2022. (2)

So while it is likely that the next bull market is spearheaded by falling inflation in developed countries, there could be a compelling divergent narrative that sees crypto prices rising from the increased adoption in developing countries where citizens have lost faith in their financial institutions and national currencies.

A shift to economic sustainability

It should be said upfront, a shift to economic sustainability is not a pre-requisite for a bull run in the way we think some of the other factors laid out in this article are. As we saw in the last crypto bull market, there were many high-profile companies running completely unsustainable business models even when times were at their best.

However, we do see it as an important sign that the next bull market is built on fundamentals, not on smoke and mirrors. As long-term backers of blockchain technology and the digital asset space, we believe that strong, positive balance sheets are at the backbone of sustainable, lasting growth in cryptocurrency markets. Real-world use cases, especially ones that can quickly achieve cash flow positivity could provide significant confidence to investors—left shaken as they are by a turbulent 2022—to re-enter crypto markets and drive growth.

The silver lining of 2022 has been the fact that many bad actors in the space have been exposed and washed out. Projects and platforms that remain are largely those that have battle-tested balance sheet management and are providing products that offer more than just the potential for speculative price appreciation.

Layer 1 blockchains like Ethereum and Bitcoin have already proved on multiple occasions that their underlying architecture continues to work despite market volatility, and this has been true in the latest crypto downturn as well. However, when it comes to cash flow generation, Ethereum is of particular interest. Upcoming upgrades promise to drastically improve scalability and could facilitate business models with compelling real-world use cases.

Decentralized payments and finance platforms built on the Ethereum network could start seriously challenging legacy services like PayPal and Visa if scaling solutions deliver as promised. If these new business models can generate sustained cashflow, we would likely see a renewed interest from investors.

When we look more broadly at the digital asset space, we also see promising case studies of companies who are weathering the crypto winter with strong business models and setting solid foundations from which to sustainably capitalize on the next bull market.

One example is Canadian bitcoin miner Digihost, who has maintained liquidity and profitability through the bear market by operating a business model that saw all infrastructure development internally funded. This stands in stark contrast to many massive American mining companies who are facing bankruptcy and restructuring due in large part to an over-reliance on debt. (3)

Many decentralized finance protocols like Meld Finance, which facilitates peer-to-peer crypto-backed cash loans, have also shown that services built on properly engineered smart contracts can insulate themselves from economic and political headwinds while generating profits in hard times.

The point here is that sustainable business models and cashflow generation weren’t necessarily the foundation on which the last crypto bull market was built. On the contrary, much of it was based on speculation, extremely cheap credit, value propositions lacking in fundamentals, and shady business practices. However, demonstrating economic sustainability would be an incredibly compelling tailwind for the sector and is an important theme to keep an eye on as investors evaluate where to put their capital during the next bull run.

Looking forward

We can’t say for certain when the next crypto bull market will come. However, we can look at history for hints as to how the future will play out. Bitcoin supply and demand dynamics brought on by the Bitcoin halving will likely create upward pressure on Bitcoin and the cryptocurrency space in general. As inflation cools and central banks reduce their hawkish interest rate hikes, we should also see greater capital inflows into digital assets. Finally, cashflow generation will be a very important indicator in measuring the quality of the coming bull market and should be a key thing to consider when investors are looking to allocate capital.

—Haan Palcu-Chang, Crypto Specialist


(1) “Number of Bitcoin block explorer wallet users worldwide from November 2011 to November 17, 2022,” Statista:

(2) “In bankrupt Lebanon, locals mine bitcoin and buy groceries with tether, as $1 is now worth 15 cents,” CNBC:

(3) “Digihost Bucks Bearish Trend Among Bitcoin Miners, Remains Cash-Flow Positive,” CoinDesk:

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