Cryptocurrencies have been around for a decade and have experienced many boom and bust cycles during their relatively short life span. The crypto market has seen many bear (negative) and bull (positive) cycles. The last bull cycle was in 2021, when most cryptocurrencies reached record highs until the market began sliding into bear territory again in 2022.
No one can say for sure when the next bull run will occur. But what’s clear is that it’ll likely be unprecedented and might surpass the record highs we saw in 2021. Let us examine the reasons behind our proposition.
1. Practical Use Cases
The value of all tokens closely tracks their utility. Demand increases if people find practical reasons to use a token.
One of the main complaints traditional finance “TradFi” adherents have about cryptocurrencies is their lack of utility beyond speculation. However, that is no longer the case. Recent years have seen many practical applications of cryptocurrencies to solve real-world problems.
For instance, lending protocols allow crypto investors to earn interest on their holdings, often higher than the savings rate from typical bank accounts. Blockchain-based games allow users to trade with their tokens and earn profit. Zero-knowledge proofs (ZKs) are maturing, allowing users to encrypt their information using tokens.
As more practical use cases emerge, demand for tokens will fly higher, and the next bull run will likely be outstanding.
2. Maturing Crypto Infrastructure
Cryptocurrencies have existed for barely a decade, unlike the traditional finance system that goes back centuries. Hence, infrastructure in this space seems lacking compared to the TradFi system.
However, crypto infrastructure is maturing as time goes on. Many people have dedicated their time and effort to building infrastructure that will usher in the mass adoption of cryptocurrencies. For instance, finding a digital wallet to store your tokens has become easier than ever. You can now sign up on an exchange and buy tokens with fiat currencies in a few steps. Institutional investors can now move enormous volumes of tokens in a few steps.
As the infrastructure evolves, crypto adoption will become easier than ever. In the next bull market run, converting TradFi users into Decentralized Finance “DeFi” users will be effortless, spurring high demand for tokens like we’ve never seen before.
3. Decentralized Apps (Dapps)
We’ve described how practical use cases drive up the value of cryptocurrencies. Decentralized apps (Dapps) are a big part of the solution. They are mobile or desktop apps run on a blockchain network, allowing users to interact with them as seamlessly as they do with typical apps.
According to DappRadar, there are over 12,000 Dapps currently, compared to just 1,000 in 2018. The market is exploding as thousands of developers think about and implement new types of Dapps. Examples include games, torrent networks, music and video streaming, social media, workplace collaboration, etc.
Dapps make it unbelievably easy for everyday users to interact with blockchain networks. As they gain popularity, they’ll draw more people into the crypto ecosystem, fueling the demand for tokens.
4. Maturing Regulations
Regulation is a major issue in the crypto ecosystem. The crypto sector grew extremely fast, and governments were slow to respond with fitting laws to guide the industry. The lack of clear regulations makes institutional and retail investors spooked about entering the crypto sector, but the situation is improving daily.
Most developed nations have begun enacting clear-cut cryptocurrency regulations, giving investors a trusted framework to follow. As regulations mature, more investors will become friendly towards the sector, especially institutional investors with big pockets, driving up the demand for cryptocurrencies.
You can always follow crypto news sites to stay updated about regulations in the sector.
The above reasons describe why the next crypto bull run will likely be massive like never before. No one can say when the next bull market will occur, but investors should always be on alert for any moves in the sector.