Economist Alex Krüger says that Bitcoin (BTC) and crypto are in a supercycle, expecting the market phase to be more than a meme this time around.
In a new discussion on the A blocmates Orange podcast, Krüger says that Wall Street and the traditional finance world have “dramatically” changed the market structure of digital assets.
[adinserter block="1"]Because of the new nature of the crypto markets, Krüger says volatility to the downside will be much more limited and that buying pressure will vastly increase due to pressure from Wall Street to increase their exposure to digital assets.
“The way we see it is, we are in a supercycle. These words used to be thrown around as a meme in crypto circles. It was actually proven to be a meme unfortunately because Bitcoin did dump 86% from top to bottom from 2021 to 2022.
But, what supercycle basically means is that – it’s not that we don’t have anymore bears or we don’t have any more corrections and we just go up – what it means is that the corrections to come are shallow.
So we’re not looking at 6% corrections, we’re looking at something like 20%, or worst-case scenario 50%, 60% corrections in the most extreme cases, and these don’t last for an eternity.
And the main driver behind this change is basically that Wall Street is here and ETFs (exchange-traded funds) are now here and this has changed dramatically the market structure.
And we’re going towards a place where people need to have more Bitcoin in their portfolios. Why do they need to? Because they’re going to be shilled this by asset managers and RIAs (registered investment advisors) and pretty much everybody in Wall Street.
That’s where we’re going. Ownership of Bitcoin right now is very low on an aggregate basis and of course portfolios.
The narrative, the marketing pitch from Wall Street is this should be around 2%. We’re very far from that. So I think we can be somewhat confident of this supercycle view for as long as we’re far away from that 2% and for as long as Bitcoin’s market cap is such a small fraction of gold’s because that’s the second narrative, is Bitcoin is digital gold, and it’s being pushed very hard now.”
At time of writing, Bitcoin is worth $68,123.
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