5 events that could put an end to the current crypto bear market

189
SHARES
1.5k
VIEWS


Much to cryptocurrency investors across the ecosystem, the bear market has officially set in and brought with it a devastating price collapse that has remained relatively unheard of.

As the popular topic of conversation now focuses on bearish predictions about how low Bitcoin (BTC) will be and how long this iteration of the crypto winter will last, those with more experience on the matter know that it is nearly impossible to predict the downside and It would be wise to apply those energies elsewhere.

Instead of focusing on the end times, perhaps it is more constructive to figure out which events can help the market break out of the depths of the bear market and put it on the path of its next cycle.

Here’s a look at five potential catalysts that could lift the crypto market out of its current malaise.

a successful ethereum merger

One of the most anticipated developments of the past five years has been the ongoing transition of the Ethereum network from Proof-of-Work to Proof-of-Stake.

While the process has been a drawn out process that has faced several setbacks, the official switch is now closer than ever after the successful completion of merge testing on the public test network Sepulia.

It is possible that the hype built around the Ethereum merge could help lift the crypto market out of its bearish state if the transition goes off without a hitch, especially if it brings greater scalability and faster user experience. helps to move forward. As it stands now, the merge is due in August 2022.

It should be noted that a successful merge can also lead to a “rumour buy, sell news” type of phenomenon, where the excitement of crypto holders causes prices to briefly pump, only to be seen once a dire situation in the global financial situation. After falling back the system comes back to the fore.

Spot Bitcoin ETF Accepted

Another phenomenon that has been rumored for years that there may be a crypto revival is the passage of a spot bitcoin exchange-traded fund (ETF) to the United States markets.

Since 2017, when the first BTC ETF proposed by the Winklevoss twins was rejected by the US Securities and Exchange Commission (SEC), there has been one rejection after another for any bitcoin ETF proposal that is physically backed.

The reasons for the rejection usually revolve around allegations that cryptocurrency markets are easily manipulated and that proper safeguards are not in place to protect investors.

If the spot ETF is approved, it would eliminate the long-standing objection and bring a new level of legitimacy to bitcoin and the crypto asset class as a whole. This has the potential to usher in a new wave of institutional adoption that could bring about the end of the crypto winter as new funds hit the market.

Fed reverses course

“Don’t fight the Fed” is a common expression that investors use to explain one of the most influential forces on global financial markets. After several years of easing currency policies and near-zero interest rates, the US Federal Reserve approved a 0.25% increase in interest rates, the first rate hike in more than three years.

Since then, the Fed has implemented two additional rate hikes of 0.5% and 0.75%, bringing the current benchmark interest rate to a range of 1.5% to 1.75%.

Over the same period, the risk-averse asset price declined around the world, with bitcoin falling from $48,000 at the end of March to its current price, which is trading near the $20,000 support.

The historic growth in the cryptocurrency and legacy markets that was seen in 2021 was largely driven by the Fed’s easy money policies, and it is highly likely that a return to such policies will see money flow into the crypto ecosystem once again.

Major adoption of bitcoin as legal tender

In 2021 El Salvador became the first country in the world to adopt bitcoin as legal tender for use by its citizens. In April 2022, the Central African Republic (CAR) became the second country to do so, pointing to an increasing trend.

While the use of BTC as a legal form of tender has been a long-standing target of crypto proponents and the decisions of El Salvador and CAR are worth celebrating, its adoption by such smaller players globally is promoting more mainstream adoption. Very little has been done for. Acceptance

However, this could change if large markets such as Japan or Germany open up to officially promote the use of BTC by their citizens for their daily purchases.

Recent developments on the global stage, including conflict and food shortages, are prompting governments to do things they never considered, and it is not out of the realm of possibility that a larger economy may consider bitcoin a last resort. As fiat currencies continue to lose their purchasing power.

READ ALSO

RELATED: EU-Regulated Firm Banking Circle Adopts USDC Stablecoin

Integration as a Payment Option by a Larger Company

A common excuse why people don’t use bitcoin or cryptocurrency for their everyday purchases is that it’s not really accepted anywhere.

While there are options available for accessing the value held in crypto, such as debit cards and online payment integration with platforms such as Shopify, the ability to make purchases by transacting directly on the blockchain network is relatively limited.

On multiple occasions, Elon Musk has demonstrated that the mere mention of integrating blockchain-based payments could lead to a market rally for the token in question.

Based on this and other examples of price pumps that follow speculation about a major adoption announcement, it is likely that crypto payments are being integrated by a major company such as Amazon or Apple, which is likely to increase the pace. Can give rise to a strong wave.

Want to learn more about trading and investing in the crypto markets?

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, so you should do your own research when making a decision.