Like all markets, there are ups and downs – tops and bottoms, in the crypto market as well. Crypto is no different than any other in that regard. However, some in crypto say that we could possibly never see a bear market again and that we are in a supercycle where the industry will continue to grow.
A supercycle is a sustained period of expansion, usually driven by robust growth in demand for products – in this case cryptocurrency. This doesn’t mean that there won’t be pullbacks and dips. Corrections and dips are bound to occur in all healthy markets. Markets that seem topless are not stable. However, supercycle proponents believe that we won’t see a crash in the crypto market like in 2017. Many investors are still troubled to this day from the losses they took in that cycle.
2020 was the beginning of the cycle
Dan Held, Kraken Growth Lead, spoke with Cointelegraph back in March in a video here.
“What happens when the whole world wakes up Bitcoin’s value proposition? It’s feasible Bitcoin could go up to one million. If we’re to look at what a super cylce represents it means that this time is different. In 2020 when COVID hit, we had excessive money printing, we had people lose faith in existing financial systems and in our government. So, we had this huge one in a hundred year moment. The last time this happened was back in 1918. So, COVID was a catalyst moment to kind of bring Bitcoin’s value proposition into focus.”
2020 was a devastating year for most. Especially in the United States. When COVID first hit, many unexpetedly lost their jobs and couldn’t pay their bills. But what’s different is that unlike most developed countries, many United States citizens received no healthcare or financial aid even during the pandemic. Dan Held brings up a crucial point here. Maybe this point in history marks the transition when financial systems are so broken that the masses began turning to crypto. This is all hypothetical, however, the Dan Held makes some valid points in his interview here in this regard. So, we can distinguish that this cycle is different than the last with the amount of people using and owning crypto assets.
The technology has changed
The cryptocurrency market of 2017 was nothing like it is now. Liquidity pools and DeFi didn’t exist back then. And neither did many projects with strong fundamental technology. Now, the number of protocols out there which are revolutionizing blockchain are so many that it’s nearly impossible to keep track of all of them. That being said, value proposition is a fundamental aspect of cryptocurrency now that didn’t exist three years ago. To some degree yes, but nothing like now. And it seems like cryptocurrency and blockchain will be the fundamental layers of the next era of the internet. If this is the case, we could very well see this bull run extend into a supercycle and avoid a crash like the last bull run.
Cryptocurrency is likely here to stay. Continued development in better user experience across many blockchain ecosystems will help spread mass adoption, and build new foundations for the crypto and blockchain industries.
If you enjoyed reading this article, you might also want to check out Polkadot Parachains Update – Sooner Than Expected.
Aaron is passionate about blockchain and has been an investor in cryptocurrencies for the past years. He enjoys engaging with other people in the cryptocurrency community online, particularly on Telegram, and learning from experts.