Is it make or break time for crypto?
6 months on from the halving, is the next Bitcoin bull run around the corner?
It's been a (southern hemisphere) winter of discontent for the cryptocurrency markets.
With Bitcoin ranging for months since April's halving, and the wider crypto market suffering as a result, there's been little to get excited about since the spot Bitcoin and Ethereum ETFs burst onto the scene.
But with Bitcoin pushing back towards $100,000 (US$69,000) and green shoots appearing across the altcoin market, there's a sense that history may be about to repeat itself.
The infamous Bitcoin stock-to-flow model suggests now is the time in the halving cycle where the price of Bitcoin starts to accelerate, bringing the rest of the crypto market with it.
This model has held true in every previous halving cycle, with dramatic price appreciation in the 6-18 month period after the halving.
In the 2016 halving cycle, Bitcoin leapt from around $650 at the time of the halving to US$20,000 18 months later.
In the 2020 cycle, it went from US$10,000 at the time of the halving to US$64,000 within 12 months.
A similarly-sized move this time around could see Bitcoin reach an eye-watering US$360,000+ in 2025 (with the Stock-to-flow model actually predicting a price in the region of US$430,0000-$450,000).
It seems fairly unbelievable, but then again, few predicted it would reach US$64,000 in the aftermath of the 2020 Covid crash.
And the macroeconomic picture certainly doesn't hurt the Bitcoin bull case.
While cost of living pressures and recession fears remain, the US Federal Reserve has led the way on interest rate cuts, suggesting a fresh liquidity cycle may be on the horizon.
Risk-on assets like crypto have historically fared very well during periods of expansion in global liquidity and the data points to 12 months of expansion, peaking around September 2025.2
Of course, the Bitcoin bull and bear cycle has become something of a self-fulfilling prophecy, with traders piling into the market when rapid appreciation is on the cards.
This means if a bull run fails to eventuate, a lot of the inherent bullishness around Bitcoin and cryptocurrency as a whole could be invalidated, leaving Bitcoin in something of an existential crisis.
While the ETFs have done a lot to legitimise Bitcoin as a serious asset, much of the interest around it stems from the expectation of outsized returns.
If it fails to live up to the billing on this occasion, it may lose much of its appeal.
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