Important takeouts:
Institutional flow is on the rise, but retail interest and app store rankings remain unusually low.
A weakening of the US dollar or adoption of major ETFs could lead to crypto market capitalization well above its previous highs.
Traders are always worried about the start of the crypto supercycle. This is a departure from the traditional four-year profit cycle after half of each Bitcoin (BTC).
Since 2021, many analysts have proposed a new paradigm in which the crypto market will rise 400% above its previous high. For example, consider X-user Cryptokaleo, who recently posted about “real” supercycles.
Even if the assumptions shared by X-user Cryptokaleo proved to be accurate, it is still too early to conclude that the market has entered the crypto supercycle. The current total capitalization of $3.4 trillion is just 29% above the $2.65 trillion peak recorded in November 2021.
So far, its projection remains unfulfilled, but there are certain factors to look for initiation of the supercycle.
The weakness of the US dollar, growth of crypto ETFs, strategic Bitcoin reserves
One such catalyst is the US Dollar Index (DXY), below the level last seen in November 2021, 95. In that case, a portion of the US Treasury’s $24.7 trillion held by the public could flow to alternative assets, including cryptocurrencies.
Another major potential driver is the rapid expansion of the Exchange-Traded Fund (ETF) industry. Despite recent momentum, the current $190 billion crypto assets are still negligible compared to traditional asset classes. For comparison, only the three largest S&P 500 ETFs control a total of $2 trillion in assets.
Despite initial enthusiasm, the US government’s strategic Bitcoin reserve plan remains vague. If the Trump administration accumulates at least 200,000 BTC, it could significantly change market sentiment. A similar effect could come from corporate finance ministry allocations by high-tech giants such as Google, Apple and Microsoft.
Hype based on retail investors’ interest and sector-themed hype
Retail investors’ participation also plays an important role in triggering the supercycle. Searching for terms like “buy Bitcoin” and “buy” remain flat for five months, far below the November 2024 high. Similarly, the Coinbase and Robinhood apps have slid into the US App Store rankings over the past three months.
While institutional capital is taking the lead in this cycle, retail-driven FOMOs still serve as fuel for parabolic growth. Another important signal is the revival of the Altcoin sector’s narrative, whether driven by AI tokens, casino coins or traditional meme tokens featuring cats and dogs.
Currently, Memecoin’s market capitalization is $68.5 billion, down from its all-time high of $1400.5 billion, which reached December 2024, according to data from CoinmarketCap.
Related: Bitcoin supply is shrinking: Will Saylor’s ruthless BTC purchase cause a supply shock?
These scenarios are speculative and rely on unpredictable macroeconomic and geopolitical developments, including the US Federal Reserve’s ability to avoid a recession and the evolution of global trade relations.
However, the closer the market is to meet these conditions, the more likely it will increase surges beyond its market capitalization of over $13.2 trillion, representing a 400% increase over its November 2021 peak.
This article is for general informational purposes and is not intended to be considered legal or investment advice, and should not be done. The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or express Cointregraph’s views and opinions.
