To the dismay of all cryptocurrency investors, the bear market officially entered and has brought about devastating price collapses that have left very few unharmed.
The topic of discussion is now about bearish predictions on how low Bitcoin (BTC), and how long this iteration will last. Those with more experience in the subject know that it’s almost impossible to predict the bottom, and that it would be wise not to use those energies elsewhere.
Instead of dwelling on the what of the end, it might be more constructive to look at the events that could pull the market from the bear market depths to set it up for the next up cycle.
Let’s take a look at five possible catalysts that could help the crypto market get out of its current slump.
Successful Ethereum merger
The ongoing transition of Ethereum’s proof-of work to proof-of stake has been one of the most anticipated developments in the last five years.
Although the process was slow and has had many setbacks, it is now much closer than ever after the completion of the Merge trial using the public test network Sepolia.
Sepolia testnet successfully merges with the beacon chain to mark another big day for Ethereum! Sepolia = Merged Goerli = Next And Then… Mainnet The Merge is coming
— Metis (@MetisDAO July 6, 2022
If the Ethereum Merge is successful, it’s possible that there will be a lot of hype surrounding the project. This could help to lift the crypto market from its bearish position. The Merge will take place as it stands now in August 2022.
A successful Merge could also result in a “buy-the-rumor, sale the news” type event, where prices temporarily rise due to the euphoria experienced by crypto holders, but then fall once the dire financial situation of the global financial sector is back in the forefront.
Spot Bitcoin ETFs require pproval
A spot Bitcoin exchange-traded funds (ETFs) have been widely rumored to be a catalyst for a revival in crypto.
Since 2017, when the U.S. Securities and Exchange Commission rejected the first Bitcoin ETF that was proposed by the Winklevoss Twins, there have been rejections after rejection for every physical-backed Bitcoin ETF.
SEC’s resistance against a spot #Bitcoin-ETF is almost legendary,” SEC Commissioner Hester Perce Hint: She hates it just as much as we do.
— Bitcoin Archive (@BTC_Archive), July 7, 2022
The rejection is usually based on the claim that crypto markets can be easily manipulated and that there are no safeguards in place to protect investors.
This would make the long-standing objection to a spot ETF disappear and give legitimacy to Bitcoin and all crypto assets. This could lead to institutional adoption, which could end the crypto winter.
The Fed reverses its course
Investors often use the expression “Don’t fight Fed” to describe one of the most powerful forces in global financial markets. After years of low interest rates and easy money, the U.S. Federal Reserve approved a 0.25% interest rate increase. This is the first hike in three years.
The Fed has since implemented two rate increases of 0.5% & 0.75%, bringing current benchmark interest rates to 1.5% – 1.75%.
Over the same time, the prices of risk assets around the globe have been falling. Bitcoin fell from $48,000 at March’s end to its current price of $20,000.
The Fed’s easy money policies in 2021 were largely responsible for the historic rise in cryptocurrency and legacy markets. It is highly probable that funds will flow back into the crypto ecosystem once more.
Bitcoin legal tender is being adopted by a large number of people
El Salvador became the first country to accept Bitcoin as a legal currency for its citizens in 2021. The Central African Republic (CAR), which adopted Bitcoin in April 2022, was the second country to do this, an indication of a growing trend.
Although the legalization of Bitcoin as a form of currency has been a long-standing goal of crypto advocates, and the decisions of El Salvador and CAR should be celebrated, it has not received mainstream acceptance from such small players.
These countries are looking at making #Bitcoin a legal tender: 1. #Mexico 2. #Panama 3. #Honduras 4. #Portugal 5. #Brazil 6. #Argentina 7. #Argentina 7. #ElSalador 2. #CentralAfricanRepublic #BTC
— July 3, 2022, BTCitcoin Xoe @Bitcoin_Xoe
However, this would change if a larger market like Japan or Germany opened up to officially encouraging the use of BTC for daily purchases by their citizens.
Recent global developments, such as conflicts and food scarcity, are forcing governments to take bold actions. It’s possible that Bitcoin could be used as a currency of last resort by a larger economy as fiat currencies continue losing their purchasing power.
Related: Bank Circle, a EU-regulated company adopts USDC stablecoin
Large companies may consider integration as a payment option
One reason people don’t use Bitcoin and cryptocurrencies to make everyday purchases is that it’s not accepted everywhere.
There are many options for accessing crypto’s value, including online payment integrations with platforms such Shopify and debit cards. However, it is not possible to make purchases directly through a blockchain network.
Elon Musk has shown that just the mention of blockchain-based payments can cause a market rally for the particular token.
JUST IN: Elon Musk’s Boring Company accepts #Dogecoin for payment for Loop rides
— Watcher.Guru (@WatcherGuru) July 6, 2022
This and other price pump examples that have followed speculation about major adoption announcements suggest that it is likely that crypto payments being integrated into major companies such as Amazon and Apple could trigger a bullish wave.
You would like to learn more about investing and trading in the crypto markets?
VanEck files with SEC for spot Bitcoin Exchange Fund 85% of merchants view crypto payments as a means to reach new customers. SurveyWSJ editorial decries SEC’s ‘bewildering’ Bitcoin ETF denials. Millions of online retailers now accept DAI via Coinbase CommerceEthereum 2.0 investors face a 36.5% greater loss than ETH spot investors — Reportcom. You should research all aspects of trading and investment before making any decision.