Exploring the changes in market capitalization during the cryptocurrency cycle, how high will Bitcoin's next bull market reach?
From the analysis of the bull and bear cycle data from 2015 to the present, Bitcoin's next bull market may rise between $124,000 and $172,000.Written by: Sectio Divina
Compiled by: aididiaojp.eth, Foresight News
"Now that this project has a market cap of 100 million dollars, is it impossible for it to increase 100 times?"
To predict the historical evolution of the crypto market, I analyzed historical data from CMC on bull and bear cycles from 2015 to the present, and made analyses and speculations.
This article will first compare and analyze the market caps of projects with the same rankings in different cycles, then draw some conclusions based on the analysis, and finally attempt to infer the changes in market cap for the current and next cycles. The data comes from the bear markets of 2015, 2018-2019, and 2022, as well as the bull markets of 2017 and 2021, with market cap rankings chosen as the 10th, 20th, 50th, and 100th.
Analysis of Market Cap Changes in Bear Markets
In the bear market of 2015, the market caps of the tokens ranked 10th, 20th, 50th, and 100th were 7.5 million dollars, 1.4 million dollars, 350 thousand dollars, and 12 thousand dollars, respectively.
In the bear market of 2018-2019, the market caps of the tokens ranked 10th, 20th, 50th, and 100th were 1.3 billion dollars, 298 million dollars, 91.3 million dollars, and 31.5 million dollars, representing increases of 172 times, 214 times, 260 times, and 25,200 times compared to 2015. Indeed, since 2015, the valuation of the crypto market has risen significantly. However, the increase from the bear market of 2018-2019 to the bull market of 2021 was still astonishing.
In the bear market of 2022 up to today, the market caps of the tokens ranked 10th, 20th, 50th, and 100th were 8.3 billion dollars, 3.6 billion dollars, 837 million dollars, and 277 million dollars, respectively, which is an increase of 6 times, 12 times, 9 times, and 9 times compared to the bear market of 2018. However, from 2018 to the bull market of 2021, the market cap rose again by nearly 10 times. Roughly speaking, the 10 million dollar valuation in 2018 is equivalent to the 100 million dollar valuation at the peak of the bull market in 2021, though we also need to consider the law of diminishing returns.
Analysis of Market Cap Changes in Bull Markets
At the peak of the bull market in 2017, the market caps of the tokens ranked 10th, 20th, 50th, and 100th were 6.4 billion dollars, 2.6 billion dollars, 504 million dollars, and 210 million dollars, respectively. Compared to the bear market of 2015, the entire market increased over 1,000 times, which is not surprising given the relatively small market size of the crypto industry in the past.
At the peak of the bull market in 2021, the market caps of the tokens ranked 10th, 20th, 50th, and 100th were 34.4 billion dollars, 12.4 billion dollars, 3.9 billion dollars, and 1.2 billion dollars, representing increases of 5 times, 5 times, 8 times, and 6 times compared to the bull market of 2017. If you did not delve deeply into the market after 2017, you might think that a market cap of 2 billion dollars could only be achieved by projects ranked in the top 20, but in reality, over 75 tokens reached the 2 billion dollar cap in 2021.
Conclusion
Never consider past bear or bull markets as limits, as the market is constantly evolving. The project ranked 20th in 2015 had a market cap of 1.4 million dollars, while the project ranked 20th in 2018 had a market cap of 298 million dollars. If you think the 298 million valuation in 2018 was too high, you would have missed many opportunities in the bull market of 2021.
To achieve returns of dozens or even hundreds of times on your investments, you need to continuously deepen your understanding and research, compare the current bear market valuations with past valuations, and attempt to predict the next bull market valuations. Of course, you should also avoid two types of projects that are difficult to participate in:
Projects with too high a barrier to entry for investment
Projects that are too early-stage and carry high risks
Inferences and Predictions
In the cycles mentioned above, when comparing the Top 10 projects with Bitcoin's market cap ceiling, we find:
Comparing the bear market of 2019 with the bear market of 2015: Bitcoin increased 19 times; the Top 10 market increased 172 times.
Comparing the bull market of 2021 with the bull market of 2017: Bitcoin increased 5.2 times; the Top 10 market increased 5.3 times.
Comparing the bear market of 2022 with the bear market of 2019: Bitcoin increased 6.4 times; the Top 10 market increased 6.4 times.
Aside from the comparison between 2019 and 2015, the growth of the Top 10 market is closely related to the growth of Bitcoin's market cap. Therefore, using BTC prices for market predictions in the next bull market can yield some quantitative inferences.
Through analyzing past data and various models for predictions, it can be concluded that compared to the peak of the bull market in 2021, the next bull market will see Bitcoin increase by 1.8 to 2.5 times, with prices rising to between 124,000 and 172,000 dollars. Further inferring, the tokens of the top 100 projects will also rise by the same magnitude, specifically: in the next bull market, the market caps of the tokens ranked 10th, 20th, 50th, and 100th will rise to 86 billion dollars, 31 billion dollars, 9.8 billion dollars, and 3 billion dollars, respectively.
Therefore, if you want to achieve a hundredfold return, you can choose projects ranked in the top 50 by market cap in the next bull market, which could potentially rise from an actual market cap of 98 million dollars to at least 9.8 billion dollars, representing an increase of about 100 times.
