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.
The 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 bitcoin’s realized price went below 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 uncovered that bitcoin’s movement in the all-time high (ATH) range last year was longer than in previous cycles. The firm attributed this to the market’s accelerated growth over the past few years, adding that it has become easier for retail and institutional investors to invest in crypto assets, unlike in 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 Always Comes Out Stronger
In the conclusive part of the report, Grayscale stated that regardless of the severity of each market cycle, the crypto industry always comes out stronger in 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 firm said.