The journey of a cryptocurrency investor is often described as a progression through three distinct market cycles. The first cycle is for learning—absorbing the hard lessons of how this volatile market operates. The second is for gaining confidence and securing some profits. The third is where the life-changing wealth is made.
For many, including myself, this current phase feels familiar. This is my second bear market, and I am preparing for what could be the third bull run. The sense of déjà vu is not just about price action; it's about the entire market mood: regulatory pressure, public skepticism, and the intense, player-versus-player (PvP) dynamic of capital rotating between tokens.
If you were part of the previous crypto winter, you likely recognize this pattern. This familiarity is a powerful advantage. Past experience provides the foundational knowledge needed to identify the beginnings of the next bull market.
While each cycle has its unique characteristics, the overarching narrative remains strikingly similar. This article explores how historical patterns can teach us to recognize the catalysts and timing of the next crypto bull run.
Understanding Market Cycles and Déjà Vu
Déjà vu is that fleeting feeling that you've experienced a present situation before. In crypto, this feeling hasn't lasted mere seconds—it has persisted for years.
I entered the market in late 2017, driven by FOMO (Fear Of Missing Out) after reading BBC articles about Bitcoin’s relentless climb to new all-time highs. My initial investment in Bitcoin doubled quickly, fueling a confidence that led me to seek even greater returns in newer, cheaper altcoins.
I found my way to an exchange and was mesmerized by the logos and promises of various projects. My "research" consisted of reading websites and whitepapers that all promised revolutionary decentralized solutions for banking, storage, and supply chains. The FOMO intensified. I invested scholarship funds into these tokens, and at one point, I even resorted to choosing investments based on the color of a token's logo. The result was predictable: I lost most of my money.
These projects had built nothing of substance—often just a website and a whitepaper. This story is common for newcomers: greed, naivety, and a lack of experience lead to significant losses. Many who experience this leave crypto forever. Those who stay, learn from their mistakes, and cultivate curiosity dramatically increase their odds of future success.
The Second Cycle: Lessons in Resilience and Innovation
Curiosity and greed are powerful motivators. After the 2017-2018 crash, my interest in crypto didn't wane. It eventually led me to a job at a Korean exchange, where I spent four years learning the intricacies of market making, analyzing hundreds of tokens, and engaging with project teams.
The market was boring and calm, reminiscent of the current lull. Other parallels from that 2018-2019 period include:
- Regulatory crackdowns on ICOs, particularly in Asia, similar to current actions in Western nations.
- Mainstream media declaring crypto a scam, dead, or a Ponzi scheme (over 385 times and counting).
- Waiting for institutional adoption, then with corporate Bitcoin purchases, now with spot Bitcoin ETFs.
- Crypto profits merely rotating between tokens without increasing the total market capitalization.
- The perpetual wait for mass adoption.
Back then, there was genuinely little to do. No DeFi, no NFTs—most activity was confined to exchanges. The highlights were Initial Exchange Offerings (IEOs) and the record-breaking, yet ultimately disappointing, EOS token sale.
Then, things began to change. In early 2020, a token called AMPL (Ampleforth) introduced me to the revolutionary concept of elastic supply. Its Rebase mechanism automatically adjusted the token's supply to maintain a target price, meaning you owned a percentage of the network rather than a fixed number of tokens. It was new, exciting, and profitable.
This was soon followed by the seismic shift of liquidity mining with BAL and COMP tokens. The concept of earning free protocol tokens for simply depositing assets was mind-blowing. This culminated in the DeFi Summer of 2020, where yield farming protocols like Yearn Finance (YFI) and SushiSwap offered astronomical, often unsustainable, Annual Percentage Yields (APYs).
The model was simple: be among the first to deposit assets into a new pool, farm the native tokens, and sell before the influx of new capital could no longer support the token's inflation. It was a Ponzi-like dynamic, but it was a powerful lesson in a recurring crypto pattern: these innovative, often inflationary, token models create the best opportunities—if you know when to exit.
The Anatomy of a Bull Run: Printing Money and Capturing Attention
A popular framework, like the "Road to Altseason" chart, illustrates how capital typically flows from Bitcoin into large-cap Ethereum and then to smaller altcoins during a bull market.
However, I believe a critical, often overlooked, component is innovative money printing.
While we in crypto often criticize central banks for devaluing fiat currency through money printing, our industry has mastered the art of printing digital money. Each cycle is kicked off by a new, compelling way to create and distribute tokens.
- The ICO Era (2017): The advent of Ethereum's ERC-20 standard made it cheap and easy for anyone to launch a token. This led to an explosion of new projects, each with a website and a promise. The bull run ended when the daily issuance of new tokens vastly exceeded the new capital entering the ecosystem.
- The DeFi Summer (2020): Protocols "printed" money through liquidity mining, distributing free governance tokens to users who provided liquidity. The narrative was more humble—decentralization and community ownership—but the mechanism was similar. The market crashed again for the same fundamental reason: over-issuance of tokens outpaced capital inflow.
- The NFT Boom (2021): The same pattern repeated. Fear of missing out on projects like CryptoPunks and BAYC led to a frenzy of new NFT mints. The market collapsed when the number of new NFTs and the attention required to sustain them reached a saturation point.
In each case, a novel form of "money printing" created a captivating narrative and initial wealth effect, attracting external capital into the core assets of Bitcoin and Ethereum before the inevitable saturation and collapse.
The Next Bull Run: New Narratives, Same Mechanisms
Before new fiat money floods into the system, the reuse of existing crypto capital through innovative leverage and new token models paves the way for early opportunities. DeFi Summer began before ETH and BTC prices skyrocketed; crypto-natives used their existing ETH and stablecoins to farm new tokens, creating a bubble of wealth persuasive enough to draw in newcomers.
I believe we are in a similar pre-bull season now, laying the groundwork for the next wave of innovative money printing. Two narratives stand out for their potential to create significant movement.
Restaking and Shared Security
Pioneered by EigenLayer, restaking allows those who have staked Ethereum (ETH) to "re-stake" their assets to secure other applications or networks built on the ecosystem. In return for taking on additional risk, they earn extra rewards in the form of new tokens.
This creates a new flywheel for token issuance. We can expect a wave of creative, liquidity mining-like tokenomics designed to incentivize participation and discourage selling. The narrative extends beyond Ethereum; Cosmos has its own version with Replicated Security (e.g., ATOM stakers securing the Neutron chain).
The key is to understand the mechanics and risks of restaking before the frenzy begins. 👉 Explore advanced staking strategies
Bitcoin DeFi
A largely untapped narrative involves bringing decentralized finance to the Bitcoin ecosystem. While Ordinals and Inscriptions have demonstrated a strong demand for NFTs and tokens on Bitcoin, they lack the complex token economics to sustain a large ecosystem.
This is where layers like Stacks come in. Stacks is a smart contract layer for Bitcoin, where DeFi apps execute but ultimately settle on the Bitcoin blockchain. Its upcoming launch of sBTC, a decentralized 1:1 Bitcoin peg, is crucial. It will allow Bitcoin to be used in DeFi on Stacks without relying on centralized custodians (unlike wBTC).
This will unlock Bitcoin's massive dormant liquidity. Protocols like ALEX are already building a suite of DeFi products—AMMs, lending platforms, and bridges—on Stacks, preparing for an influx of capital. The potential for new token models and yield opportunities on the world's largest cryptocurrency network is immense.
When Will the Bull Market Return?
The two narratives above have the potential to kickstart the next cycle due to their compelling stories and capacity for controlled token inflation. However, the final ingredient is macro-economic.
Sustained bull runs require an influx of external capital, which is heavily influenced by broader financial conditions. Key factors showing signs of improvement include:
- A potential shift in the Federal Reserve's interest rate policy.
- Slowing regulatory pressures in key markets.
- Peak inflation in many Western economies.
If historical cycles hold, we could see Bitcoin challenge its previous all-time highs (~$69k) by late 2024, setting the stage for a potential parabolic advance into 2025.
The inflationary "Ponzi" phases of new narratives like restaking and Bitcoin DeFi would likely begin before these new price highs. Now is the time for research and learning. When the fun starts, you need to be prepared with a strategy—and an exit plan.
Frequently Asked Questions
What are the main phases of a crypto market cycle?
A typical cycle has four phases: accumulation (steady prices after a bottom), markup (the bull run), distribution (topping out), and markdown (the bear market). Each phase is characterized by different investor psychology and trading volume.
How can I identify the start of a new bull market?
Key signals include sustained upward momentum breaking key resistance levels, increasing volume, positive shifts in macro-economic conditions (e.g., lower interest rates), and the emergence of a strong, new narrative that attracts development and capital.
What is the biggest mistake investors make in a bull market?
The most common mistake is letting greed override a predetermined strategy. This includes holding onto assets for too long expecting endless gains (FOMO) and failing to take profits, or conversely, panic selling during normal corrections. Always have a clear plan for taking profits and managing risk.
Is 'this time different' in crypto cycles?
While the surface-level narratives and technologies change (ICOs, DeFi, NFTs, Restaking), the core underlying mechanisms of hype, capital flow, and token inflation remain consistent. Human psychology of greed and fear is the constant that drives these cycles.
How important is macroeconomics to crypto prices?
Extremely important. Since the 2020-2021 cycle, crypto has become increasingly correlated with traditional risk-on assets like tech stocks. Federal Reserve policy, interest rates, and liquidity conditions are now major drivers of crypto market momentum.
What should I do to prepare for the next bull run?
Use the bear market to build your knowledge base. Research fundamental analysis, understand new narratives like restaking, organize your portfolio strategy, and secure your storage solutions. The preparation you do now will determine your success when prices start to move.