The term Bitcoin Supercyle is being used more and more in discussions. We explain here what this can mean for BTC and other cryptocurrencies as well as the financial sector.
Translated, the Bitcoin Supercycle is called Supercycle, but the English version remains in use. Economic experts speak of a super cycle when a market segment has consistently developed positively over a long period of time. This was most recently observed using the example of shares in Facebook, Apple, Netflix and Google, which are summarized under FANG in the USA. FANG has easily outperformed its competitors on the stock markets since 2014, and anyone who invested there could benefit greatly from the FANG Supercycle without any problems. The prerequisite, however, was to get on board as early as possible. Now there are signs of a Supercyle around Bitcoin, which will also include some Altcoins, experts believe. We would like to give you arguments for a Bitcoin Supercycle as food for thought:
- BTC has arrived on Wall Street as a store of value and the crypto industry in general is being driven by Decentralized Finances (DeFi). DeFi can prove to be a game changer for the financial world and builds on altcoins such as Ethereum (ETH), Binance Coin (BNB) and Solana (SOL).
- As the FANG Supercycle was picking up speed, many institutional investors asked: “It’s all very well that Facebook and Google have a lot of users. But how can you make a profit from it? ”Risk capital, on the other hand, recognized earlier that user numbers would form the basis for a successful business model. Institutional investors do not want to understand the next supercycle too late.
- Communication channels have changed fundamentally over the past decade. Facebook shows how newspapers are displaced. Because today everyone can publish online and finds platforms that monetize this through advertising or subscriptions, for example. New monopolies are forming on the Internet that guarantee audiences and attention. For Bitcoin and DeFi, the situation is almost heavenly, because users simply stay online from the information to the deal in this super cycle.
- DeFi is usually still criminally underestimated by the classic financial world. But fintech shooting stars like Robinhood or eToro are already proving that the younger generations in particular no longer want banks for their investment strategies. It is only a small step from there to decentralized platforms and brings the plus point of decoupling even more from outdated centralized ideas. Decentralized crypto exchanges such as Uniswap (UNI) or PancekeSwap (CAKE) are leading the trend.
- The Bitcoin Supercycle starts as micro, like FANG once did. When mass adoption then sets in and one can speak of macro, exponential growth can no longer be stopped. DeFi is evading regulation anyway, and despite all prophecies of doom, Bitcoin gained in seriousness when the legal environment was created for BTC.
Dangers in the Bitcoin Supercycle
Supercycle means that developments are going “super” in all respects. Anyone who also thinks of “super losses” and “super volatility” will recognize risks in the Bitcoin Supercycle. And looking back at the FANG Supercyle: Investments in Yahoo instead of Google, studiVZ instead of Facebook and Microsoft instead of Apple would not have paid off in a comparable way. Keeping your nerve in the Bitcoin Supercycle and identifying tomorrow’s winners early on is a demanding task. Increasing trading in crypto derivatives and the growing number of market participants make the analysis of the Bitcoin Supercyle difficult. In addition, specialist knowledge is increasing, which will feed doubts about some crypto projects.
Conclusion: Bitcoin Supercycle – sensible theory or risky imagination?
The distrust in government monetary policy due to inflation is a driving element that lures institutional and private investors towards Bitcoin. With the crypto reserve currency BTC as a bridge, the rapid growth in the DeFi and NFTs sectors would have to prove sustainable for the definition of a supercycle to take effect. Because Bitcoin on its own does not meet the requirement for a super cycle that covers an entire market segment. So it might make more sense to discuss a crypto supercycle. The FANG Supercycle demonstrates a fundamental problem with theoretical considerations: A Supercycle only proves itself in retrospect.
For you as an investor, this means: Take your time for your own research and create your strategies for the medium and long term. This optimizes your chances of being on the winning side of a Bitcoin Supercycle. If you doubt the mass adoption of crypto and DeFi, the theory of the Bitcoin Supercycle is unlikely to make you happy.
If you don’t have any Bitcoins yet, you can buy them here: