Post
Topic
Board Economics
Merits 1 from 1 user
Re: How Bitcoin Supercycle could become reality
by
d5000
on 28/03/2024, 23:18:54 UTC
⭐ Merited by virginorange (1)
But my worry is that there's also the probability of the opposite of the supercycle - super bear market that could happen if investors and traders get bored of Bitcoin and move on to something different, something completely unrelated to cryptocurrency. With a lot of money leaving the market and no new investments, there good be a very long depression with the price falling down by 80-90%. Essentially it would mean that majority of the Bitcoin market history was a big long bubble, and the bear markets were just corrections of this long mania phase.
Yep, there is for example the "long Elliott wave" theory, for example shown here. Essentially while this model is still bullish, it implicates that the price would fall, after reaching >100.000$, to much lower lows than we're accustomed to and for more than 4 years without ATH, even if the long term trend could be still bullish. And there is also the Hyperwave theory with similar assumptions.

On the other extreme we see the S-curve of adoption theory, which is the base for highly speculative models like Stock 2 Flow, but also for more serious concepts, like Bitcoin being adopted massively for payments and savings alike.

As I wrote in the OP, I think everything depends on the kind of adoption we'll see in the coming years. If Bitcoin isn't able to convince the world that it has real value, and only remains an asset people buy to "make money" and get rich fast, then a super bear market is completely possible.

Such a super bear market could however also be an opportunity: if the speculative capital is driven out, but Bitcoin's USPs remain uncontested (uncensorable, borderless digital money), then the supercycle could even materialize after a super bear market with prices of let's say <$5000. Basically that would be similar to the dot-com/tech bubble, which lasted a little bit less than 10 years until it popped (early 90s to 2000/2001), followed by a depression but then sustainable growth after 2009/2010 when the business models that were still an illusion in the 90s and early 2000s finally began to work.