The economist Alex Krüger believes that Bitcoin and the crypto market are in a supercycle, contrary to previous beliefs that this term was just a meme in the crypto community. Krüger explains that the market structure of digital assets has significantly changed due to the involvement of Wall Street and traditional finance institutions. This shift has led to limited downside volatility and increased buying pressure on digital assets.
Krüger describes a supercycle as a period where corrections in the market are shallow, ranging from 20% to 60%, instead of the extreme drops seen in the past. He attributes this change to Wall Street’s interest in increasing their exposure to digital assets through ETFs and the push for asset managers and investment advisors to include Bitcoin in portfolios. The current ownership of Bitcoin is still low compared to traditional assets, with the narrative that Bitcoin serves as digital gold becoming more prevalent.
With Bitcoin’s price currently at $68,123, Krüger suggests that as long as Bitcoin’s market cap remains a small fraction of gold’s and the ownership of Bitcoin in portfolios is below 2%, the supercycle view is likely to continue. The economist expects ongoing pressure from Wall Street to drive the adoption of Bitcoin as an essential asset in investment portfolios. The narrative of Bitcoin as digital gold is gaining momentum, further supporting the idea of a supercycle in the crypto market.
In conclusion, Alex Krüger’s analysis points to a significant shift in the digital asset market, with a supercycle potentially underway due to increased interest from Wall Street and traditional finance institutions. The market structure of digital assets has evolved, leading to more stability and buying pressure on assets like Bitcoin. As adoption of Bitcoin as a valuable asset in investment portfolios grows, the narrative of Bitcoin as digital gold is being promoted, reinforcing the notion of a supercycle in the crypto market. With Bitcoin’s price remaining strong, the future of the digital asset market looks promising for investors and enthusiasts alike.
