9 January 2024
Crypto exchange Coinbase, one of the largest exchanges in the world, has released its latest report on Bitcoin and the crypto market, highlighting its expectations for the Industry. The 44-page report launched by Coinbase Institutional in conjunction with Glassnode predicts a repeat of one of the most explosive bull markets in recorded crypto history; the 2018-2022 market cycle.
Coinbase Says Bitcoin Will Repeat 2018-2022 Cycle
In the report, Coinbase and Glassnode analysts take into account a number of indicators and metrics, such as total supply in profit, among others, to figure out which trend the next bull market is expected to follow. Now, after consideration and comparison to all of the previous bull cycles, the analysts settle on the 2018-2022 cycle being the most likely to be emulated this time around.
So far, Bitcoin and Ethereum are the cryptocurrencies that have shown the most correlation at the start of the 2018-2022 cycles, suggesting that a similar breakout could be in the cards. However, looking at the chart, it shows a sharp deviation from the previous cycles, especially as the bull market looks to be starting earlier than it did in 2020.
When it comes to the level of risk associated with assets such as Bitcoin and Ethereum, the report highlights the fact that crypto has deviated from traditional assets once again. This comes after the correlation between crypto and traditional finance markets rose to new all-time highs back in 2022. But as Coinbase explains, “2023 saw a reversion to historical norms, indicating that crypto can be a source of idiosyncratic risk.”
As another Bitcoin halving event draws near, Bitcoin has also seen a resumption in its surge, spurred forward by expectations of a Spot Bitcoin ETF. Coinbase notes that “As crypto has matured as an asset class and institutional participation has increased, volatility has trended steadily lower.”
What Happens If BTC Price Repeats 2018-2022 Cycle?
Looking back at the last bull cycle shows us what to expect if Bitcoin and the crypto market at large were to repeat the same trend. In this case, expectations would be that the BTC price would rise at least 3x higher than its previous all-time high price of $69,000.
In this case, Bitcoin would be looking at a value of at least $200,000 by the time the next bull market is in full swing. Following the 3.6x move that Bitcoin did to reach its new 2021 all-time high versus its 2018 all-time high, the BTC price would be looking at a cycle peak of almost $250,000.
As for Ethereum, following the same trend and doing a 3.2x from its previous all-time high to its new all-time high, it would put the ETH price above $15,000. In the same vein, the crypto market would also rise more than $10 trillion.
However, all of this is speculation as the crypto market has been known to deviate from expectations. Like the previous bull markets, the next one is expected to be novel, especially given the fact that institutional investors have fully come out to play. This could mean hundreds of billions of dollars in liquidity injections that could drive prices higher than expected.