The concept of a Bitcoin garnered significant attention in the cryptocurrency industry, with experts debating its feasibility and timing. This supercycle is theorized to occur when Bitcoin achieves new all-time highs without subsequent significant downturns, driven by widespread adoption and institutional support. The idea was first proposed by Dan Held in 2020, emphasizing factors like network value growth (Metcalfe’s law), scarcity due to Bitcoin halving events, and increased institutional investment.supercycle has
Bitcoin’s boom-and-bust cycle is influenced by various factors, including its programmed halving events, network adoption, technological advancements like the Lightning Network and Ordinals, and institutional interest. Despite these factors, Bitcoin experienced a significant drop from its all-time high of $69,000 at the end of 2021, signaling the end of the previous cycle. The launch of Bitcoin ETFs globally, including in Canada, Germany, Brazil, and Australia, marked a growing institutional interest, although it wasn’t sufficient to sustain Bitcoin’s price.
In 2023, Chainalysis reported India, Nigeria, and Vietnam as leading countries in crypto adoption, with the U.S. ranking fourth. This adoption trend signifies the increasing relevance of decentralized actors in determining a commodity’s market value. However, in the U.S., Bitcoin’s usage as a medium of exchange is limited, with stablecoins dominating transactions. The growing adoption in lower-middle-income countries reflects Bitcoin’s potential as an alternative to local currencies amidst inflationary pressures.
The concept of a supercycle entails the convergence of institutional demand, limited supply, and widespread adoption. The next Bitcoin halving event, expected around April 2024, will further limit supply, potentially increasing its fiat price. However, Bitcoin’s long-term value relies on its adoption as a medium of exchange, a store of wealth, or a hedge against inflation.
Experts like Tim Draper and Julian Liniger believe that factors such as the upcoming halving, interest in Bitcoin ETFs, and the global financial climate could contribute to a potential supercycle. However, there are divergent views on its timing, with some predicting it may not happen until a later cycle, potentially around 2028.