10 Reasons to Believe in the Resurgence of the Cryptocurrency Bull Market

10 Reasons for Cryptocurrency Bull Market Resurgence

From: The Daily Degen Editor @Rektdiomedes

Translation: LianGuaiNews

The cryptocurrency industry has experienced multiple “deaths”, but each time it has been able to come back to life. Based on this spirit, we have analyzed the top ten reasons why the cryptocurrency market can not only continue to survive, but also thrive and even experience explosive growth in the next few years.

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Reason 1: Stablecoins have started to play the role of “dollars as a service”

Stablecoins have proven to be a “sticky use case” for cryptocurrencies, especially in the current global environment where the demand for the US dollar is so great. Fundamentally, stablecoins are a simple concept, but they have specific advantages such as programmability, permissionless, borderless, low cost, fast settlement, interoperability, and high liquidity.

For people in developing countries, stablecoins are playing the role of “dollars as a service.” This phenomenon is already evident in countries like Pakistan and Argentina, where people can remit globally without going through multiple complex “intermediaries.” Moreover, on-chain stablecoins not only mean a better monetary system, but also a better “legal” system. Ethereum provides a reliable “legal” system (code is law) to anyone connected to the internet. Stablecoins and smart contracts will become an indispensable part of the global economy, just as we can’t imagine the world today without the internet.

Reason 2: Cryptocurrencies have better payment efficiency

Anyone who operates online businesses using on-chain stablecoins knows that cryptocurrency payments are 100 times more efficient than using traditional companies like LianGuaiyoneer/Wise. Sometimes, using traditional payment services like LianGuaiyoneer/Wise can be a nightmare because they are not only inefficient, but also have to comply with outdated regulatory requirements.

In response to this issue, financial technology analyst Boaz conducted an in-depth analysis on his personal social media, listing seven current solutions for cross-border transfers offered by traditional financial institutions, but unfortunately, each one is extremely complex. In contrast, you will find that with the rise of Layer 2, on-chain costs are becoming lower and lower, and with the support of stablecoins, a payment tool has been created that is clearly superior to traditional banking services.

Reason 3: Cryptocurrencies are being adopted by more institutions

Currently, the possibility of approval for a spot Bitcoin ETF is increasing, and more and more authoritative institutions in the financial industry have expressed their support for Bitcoin (in many cases, they have also expressed their support for DeFi). In fact, Wall Street seems to have realized a truth – they would rather make money from the public’s enthusiasm for cryptocurrencies than try to fight against it.

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In this regard, it seems that no one understands it better than Larry Fink, the CEO of BlackRock. In 2017, he referred to Bitcoin as a “money laundering tool used extensively for illegal gains.” However, by 2023, he has changed his stance and now refers to Bitcoin as “highly international and capable of surpassing any currency, becoming an alternative international asset, similar to ‘digital gold’.”

Reason 4: Privacy/Account Abstraction

Currently, many projects lack support for privacy, which hinders the adoption of encryption technology for mainstream business needs. However, this situation is changing. Privacy is crucial in financial transactions, as Vitalik Buterin stated, “If [privacy] doesn’t exist, then Ethereum fails because all transactions (including POAP, etc.) are publicly visible.” The most significant effect of enhancing on-chain privacy protection will be the facilitation of more “traditional business” migrating to the blockchain, such as AP/AR, payroll, balance sheet management, accounting, etc.

Reason 5: Increasing Digitization of the Global Economy

Over the past decade, global business has become increasingly “online” – remote work, cryptocurrencies, artificial intelligence, social media, etc., have all become part of this online trend. As this evolution accelerates, the advantages of internet-native cryptographic assets/infrastructure will become increasingly apparent compared to existing bank-based systems that are not adapted to the online world. Today, the global economy is becoming more flattened, which is a positive trend for cryptocurrencies. The applicability of cryptocurrencies is also becoming stronger, with online economic participants in emerging markets such as Nigeria and the Philippines being able to rely less on traditional global banking systems.

Reason 6: Dollar Depreciation/Reflexivity

Clearly, the West lacks the political will for fiscal austerity, and even Powell’s interest rate hikes only highlight the dominance of fiscal policy. The surge in US interest expenses has led to further budget deficits, creating a fascinating feedback loop where the depreciation of the US dollar actually increases the nominal price of cryptographic assets, further fueling speculative fervor and stimulating public interest in cryptocurrencies, thereby promoting adoption.

Reason 7: Individual Sovereignty

Countries like the United States, Canada, and Western Europe are experiencing decline in social, cultural, demographic, and economic aspects. This seems to be an undeniable fact. As things inevitably worsen and the aforementioned sovereign debt crisis escalates, the value proposition offered by cryptocurrencies, which are permissionless and self-custodial, becomes exceptionally important.

Reason 8: “Destiny-oriented” Bullish

In the context of a more turbulent global economy, the traditional upward mobility path seems less realistic for ordinary people. More and more people hope to become “overnight rich” through speculative means, so they turn their attention to the cryptocurrency market. This is actually a background of the “destiny optimism” of cryptocurrencies.

Although this idea is not worth encouraging, it is an important factor driving the upward trend of the cryptocurrency market.

Reason 9: Consistent with Corporate Cultural Transformation

In traditional companies, everyone works in a “cubicle” workstation, which has caused strong resistance to this working culture. This paradigm shift has been ongoing since the 1990s and has accelerated in recent years. Cryptocurrencies conform to this “rejection” trend in many ways. To some extent, corporate cultural transformation is a downstream effect of the digital economy and represents a positive transformation in people’s minds.

Reason 10: Intellectual Capital

The last reason is actually very simple. The reason why cryptocurrencies continue to grow is because they attract the smartest, most intelligent, and most creative young people on Earth. The greatest thinkers of our generation are building in various fields of the blockchain economy. Rather than betting on cryptocurrencies, it is better to bet on this huge source of intellectual capital.

Do you think there are any other reasons? If you have any opinions or thoughts on the above ideas, feel free to let us know!

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