- The best way to determine when the crypto bear market will end is to analyze the possible events that could cause it to occur.
- The adoption of Bitcoin as legal tender in more countries and the integration of cryptos as a payment option by a large company are two such events.
Officially, the crypto market is now bearish. Thus, many crypto investors have been humiliated. This slowdown has caused a huge drop in crypto prices, with many crypto investors recording losses on their investment in digital assets. Hence, the heated debate in the crypto space has been the predictions of the end of the crypto winter.
However, experienced industry analysts firmly believe that it is not possible to predict when a crypto winter will end. On the contrary, it is better to analyze the possible events that can take the market out of these bearish conditions. Below are the top five catalysts that can push the crypto market on the road to recovery.
Related: Bitcoin and Altcoins Jump Over 5%, Has Bitcoin (BTC) Already Hit Bottom?
The successful transition from Ethereum to PoS
Over the past five years, many market players expected the Ethereum network to change from a pow (proof of work) network to a pos (proof of stake) network. Many setbacks have plagued the Switch. However, the success of the merge trial on the public trial shows that the switchover is closer than ever.
If the change is successful, the hype surrounding it could have a positive impact on the crypto market. The change will also have a positive impact on the market if it results in greater scalability and a better user experience. However, it should be noted that the hype may fade and cryptos may return to their “pre-hype” prices.
Related: Ethereum successfully launches Beacon chain on Ropsten testnet, The Merge coming next week
Approval of a spot Bitcoin ETF
The SEC has not yet approved a spot Bitcoin ETF for the US market. Therefore, approving one now could cause the crypto market to rally. The US SEC has rejected several BTC ETF proposals since 2017, when the Winklevoss twins became the first to submit a BTC ETF proposal.
The SEC often states that it has not approved any spot BTC ETFs due to the easy manipulation of the crypto market. It also indicates that there are not enough investor protection policies in the market. Therefore, if the US financial regulator approves one now, large-scale investors would be more interested in investing in the crypto market. Their injection of liquidity could lead to a rally in the crypto market.
Related: Bloomberg: Bitcoin ETF could be approved by the SEC in 2023
A return to the US Fed’s easy money policies
Over the past three years, the Fed has implemented various easy money policies with near-zero interest rates. However, earlier this year the US Fed raised interest rates for the first time by 0.25%. It has also hiked rates twice since that first time. Currently, benchmark rates vary between 1.5% and 1.75%.
The rate increases have sent crypto prices plummeting. Between March 2022 and now, the price of Bitcoin has fallen by $28,000. If the Fed could re-enact its easy money policies, there would be more cash injections into the crypto space. Thus, leading to a rebound in the crypto market.
Adopt Bitcoin as legal tender
For now, El Salvador and the Central African Republic are the only countries to have adopted Bitcoin as legal tender. While crypto advocates celebrate the feat, the adoption from these countries has not resulted in wider adoption. However, this could change if major economies like Japan or Germany announce the adoption of Bitcoin as legal tender.
With increasing food shortages, conflict and other macroeconomic issues, many authorities are beginning to think outside the box. Therefore, a leading economy may soon adopt Bitcoin as their currency if the purchasing power of fiat currencies continues to decline.
Big Company Crypto Payments Integration
The lack of wider adoption of crypto is one of the reasons why many prefer not to use cryptos (including Bitcoin) for their everyday purchases. Although there are indirect ways to perform crypto transactions, there are limited ways to perform such transactions directly on the blockchain network.
Elon Musk has repeatedly proven that the integration of blockchain-based payments can lead to a huge market upturn for the token used for this purpose. Therefore, if a big company like Apple or Amazon integrates crypto payments, it could lead to a bullish crypto market.