How Many Trillions Will The Crypto Market Hit This Bull Market?

Hey LinkedIn,

With the crypto market cap nearing $3T, many investors are asking us how high we expect prices and valuations to run in this bull market. We dive into this below.???

Past Cycle Tops

Before attempting to predict the peak market valuation of this bull market, it's essential to look back at how previous ones unfolded:

• 2013 cycle: The market's early days saw a peak combined market cap of ~$13B with BTC hitting ~$1,100.
• 2017 cycle: The combined market cap topped at ~$830B, with BTC and ETH peaking at ~$20,000 and ~$1,400, respectively.
• 2021 cycle: When many of us were locked inside due to COVID-19, the combined market cap peaked at a whopping $3.02T, with all-time highs celebrated by the majors including BTC (~$69,000), ETH (~$4,800) and SOL (~$260).

Estimates For This Current Bull Market

At the time of writing, the global market cap is $2.6T, which has more than tripled from the cycle lows in the aftermath of FTX's collapse in late 2022. (Interestingly, the entire market is still smaller than individual companies such as Apple ($3.3T) and Microsoft ($3.3T).)

So, how high can the market cap go from here??Let's go over some possible multipliers:

• 2x growth: $5.2T
• 3x growth: $7.8T
• 4x growth: $10.4T

In our opinion, doing a 4x from here is far too unrealistic. Even a 3x? seems like a stretch. Not impossible, but highly unlikely.

We feel far more confident in estimating that the peak of this bull market will happen once the global market cap is somewhere between $6T and $7T.

Of course, just as there will be altcoins that do a 10–20x from now onwards, there will be those that meander higher by 20–40% and seriously underperform.

This is why you can no longer throw a dart at any altcoin and expect to gain multiples on your investment. Those days are long gone.

Key Variables To Monitor

The following could drastically impact how high the market goes during this bull market:

• Institutional adoption: Increased investment from large entities could see demand go to a whole new level.
• Regulatory developments: Thoughtful and comprehensive laws related to crypto would significantly ease investor uncertainty, presumably leading to increased buying pressure.
• Technological advances: Innovations, particularly in scalability and usability, could drive broader adoption.
• Macroeconomic environment: Factors like inflation and interest rates will continue to greatly affect the market outlook for crypto.

Of note, there are tens of thousands more tokens in the market than the 2021 cycle top. Also, this time around, there are many more projects currently going through heavy vesting schedules, with new tokens constantly entering circulation.

While these two factors naturally place upward pressure on the global market cap, their impact is immaterial given they only account for a tiny percentage of the overall market size. (For reference, BTC, ETH and stablecoins are nearly 80% of the global market cap.)

Conclusion

This bull market is roughly at the halfway point, in our opinion. From here, we expect the global market cap to more than double, topping out between $6T and $7T.

For investors, it will be crucial to monitor factors that can affect the growth potential of this bull market (e.g. regulatory developments, interest rates, liquidity conditions).

Record 19-day streak of net inflows ends for Bitcoin ETFs

What happened? The U.S. spot Bitcoin ETFs experienced net outflows on June 10, ending a record 19-day streak of net inflows that exceeded $3.3B.

Why does it matter to you? While ETF flows are still incredibly important to track, it's worth noting that some of this demand is almost certainly coming from hedge funds who are executing cash-and-carry trades.

Biden campaign reportedly in talks to accept crypto donations

What happened? U.S. President Joe Biden’s re-election team has been in talks about accepting crypto donations, according to The Block.

What does it matter to you? The Biden administration's views of crypto have gradually worsened since the FTX collapse in late 2022, making this report a surprise. Optimistically, assuming these reports are true, this may signal that Biden is softening his anti-crypto stance. (That said, we think it's best to be skeptical when it comes to this story.)

• Optimism released fault proofs after years of development, making the network a lot safer for users.
• Arbitrum announced a program to grow its gaming ecosystem, setting aside 225M ARB (≈$211M) tokens to distribute over three years.
• ZKsync announced its ZK token and an initial airdrop consisting of 17.5% of the total supply.
• The proposed token merger between Fetch.ai , SingularityNET and Ocean Protocol was delayed until July 15.
• Polygon introduced a community treasury to fuel ecosystem development, with plans to distribute 1B MATIC (≈$626M) tokens over 10 years.
• Moonbeam, a parachain on Polkadot, announced $19.5M in funding to accelerate ecosystem growth.

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