Crypto: When does the next beef market begin?

With a few rare exceptions, investing in cryptocurrency in 2022 has been a disaster. Even market leaders like Bitcoin and Ethereum have lost more than half their value, and some smaller cryptocurrencies are down 80% or more.

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While the stock market has a long-term track record of recovering from the bear markets and continuing to set new heights, there is no such story for the crypto market. This has led many market participants, from investors to savvy ones, to wonder when – or if – the next beef market will begin in cryptocurrency.

Here are some insights from a few experts in the field.

2023

One of the most bullish experts when it comes to cryptocurrency is Yves Lamoureux, president of the macroeconomic research company Lamoureux & Co. Over the years, many savvy people have thrown out the mythical figure of $ 100,000 as a price target for Bitcoin, and Lamoureux is none. different. In fact, as recently as May 26, 2022, Lamoureux suggested that Bitcoin will reach its high price as soon as the end of 2023.

But just because Lamoureux thinks a beef market is brewing in Bitcoin, does not mean that he necessarily supports a major rally in the asset class as a whole. In fact, he advises against a shotgun approach to investing in cryptocurrencies.

Lamoureux feels that smaller cryptocurrencies are too risky and that investors should not go too far away from Bitcoin. As Lamoureux himself puts it: “I am interested in Bitcoin because it is the king, and that is where institutional money will flow first. So always stick to the best. Everyone wants to be Bitcoin, but they are not. … Do not make it complicated; stick to bitcoin. “

2024

While Lamoureux feels that the next stage in Bitcoin is just around the corner, a number of experts believe that 2024 should be the big year for cryptocurrency in general, with Bitcoin as the leader.

This is because the next “halving event” for Bitcoin will take place in 2024. A halving event is a common event that makes it more difficult to extract extra Bitcoin. This reduces the revenue supply of Bitcoin, and makes it theoretically scarcer and potentially more valuable, according to the laws of supply and demand.

But history has also shown that there is traditionally an increase in Bitcoin prices after each halving event. Therefore, many experts, including Lamoureux, believe that the price of Bitcoin may jump again in 2024 – based on both historical precedent and basic economic principles.

For example, Du Jun, co-founder of Huobi, suggests that it could be something of a “crypto winter” until prices rise again in 2024 and into 2025. Du Jun also subscribes to the belief that Bitcoin will not increase until the next halving event in 2024.

As he told CNBC, “It will not be until the end of 2024 to the beginning of 2025 that we can welcome the next bull market on Bitcoin.”

Never?

Many traditional, traditional investors believe that the times of cryptocurrency are numbered and that there may never again be a bull market in the asset class. None other than Warren Buffett, CEO of Berkshire Hathaway and “The Oracle of Omaha”, has had many negative things to say about crypto in general and Bitcoin in particular.

In 2018, Buffett told CNBC that cryptocurrencies “will have a bad ending.” At Berkshire Hathaway’s annual shareholder meeting in 2022, he said he would not “buy all Bitcoin in the world for $ 25.”

His co-chairman Charlie Munger is similarly down when it comes to crypto, and calls it “rat poison”.

Or is this sale just a “typical” bear market?

Some industry experts believe that while the current cryptocurrency sales may be unparalleled, it is a completely normal process.

Jason Yanowitz, co-founder of Blockworks, a research platform for crypto-investors, said: “Crypto-bear markets typically pull down between 85% and 90%.”

Yanowitz notes that over the past decade, there have been two vicious bear markets in crypto, where Bitcoin has lost more than 80% of its value. But both times it came back and went to even greater heights. Thus, he believes that investors should not be scared away from the recent significant price drop.

The bottom line

Cryptocurrency has always been a haven for speculators, and it may explain the difference of opinion between more traditional investors and the new generation. For every Munger or Buffett who thinks crypto will go to zero, it’s just as likely that you hear a Yanowitz sound like a cry for investors.

Whichever side of the argument you fall on, be sure to consult with a financial advisor to see if cryptocurrency matches your investment goals and risk tolerance.

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