One of the biggest Bitcoin miners in China is suggesting the top-cryptocurrency may turn bearish in 2022 as the traditional economy recovers. However, institutional interest may buoy optimism.
Bitcoin Bear-In-Waiting
According to one of China’s biggest Bitcoin (BTC) miners, Jiang Zhuoer, the top cryptocurreny might enter a bearish period in the summer of next year.
In an interview with Chinese crypto-media journalist Wu Blockchain, Jiang Zhuoer pointed out that multiple studies suggested the Bitcoin market’s growth might begin slowing in autumn this year.
This coincides with the estimation as to when COVID-triggered economic recovery plans will start to see some effect. The suggestion is that when the traditional economy recovers, investors will turn to the “normal” economy. This will take attention away from cryptocurrencies.
Indeed, he points out that following Tesla revealing its enormous $1.5 billion purchase, there have not been any significant reveals from other large institutions.
His opinion also corresponds with predictions based on the market’s previous cycles. This suggests that Bitcoin bull markets traditionally only last around two years.
Institutions to the Rescue
Despite this rather bearish prediction, Zhuoer also makes the point that institutions could come to BTC’s rescue. Indeed, several institutions are ramping up their cryptocurrency activities to service increased demand.
Earlier this year, America’s oldest bank announced its plans to launch a cryptocurrency custody service. Moreover, Goldman Sachs conducted a client survey. The results revealed that 40% of its clients already had exposure to cryptocurrencies. In response, the banking giant re-opened its crypto trading desk.
Both of these suggest that institutional interest is still present and potentially still material, even if not publicly announced. Indeed, the number of exchange-traded-funds (ETFs) is on an uptrend.
This is undoubtedly a strong indicator of institutional interest as traditionally only large investors have the ability to use them to invest in Bitcoin.
A New Cycle?
While these developments are expected in a surging market, there are also suggestions from the community that may be a mark of a new cycle for the Bitcoin market.
Traditionally, a bull cycle might last just a few years before entering a corrective phase. However, Zhuoer and others believe the institutional interest this time could prolong the optimism in the market.
Accordingly, this would sustain the market’s demand, which, combined with the reported cryptocurrency supply shortage, could push the market to new heights.
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