When Will The Bitcoin Bear Market End?

Cryptocurrency has entered what many have described as a bear market. The price of Bitcoin, the cryptocurrency with the largest market cap, has fallen from a record high of $68,000 in November 2021 to a current price of $20,000. The price of altcoins has suffered the same fate as Bitcoin with many altcoins seeing drops of over 75% from their all-time high around November 2021. 

Cryptocurrency skeptics claim that the price of cryptocurrencies will never recover. However, skeptics say that during every bear market, so it’s not a particularly useful take at this point. The price of Bitcoin will almost certainly recover like it has done after every bear market. The bigger question is when will the recovery take place. An argument can be made that the bear market will end around the next Bitcoin halving because that is what has always happened, but there are multiple factors that could cause an even earlier end to the current bear market. 

Here’s Why This Bear Market Different Than Previous Bear Markets

First things first, the cryptocurrency skeptics are right about one thing – this bear market is a lot different than the previous bear markets for one reason. This bear market is occurring during what will almost certainly be considered a global economic recession. The simple fact is there is no one really knows how the market will react to Bitcoin during a recession because Bitcoin was created immediately after the last recession. 

With that in mind, we can make educated guesses about how the market will treat Bitcoin during a recession. The two most basic ways the market can look at Bitcoin is either as a speculative asset with a high risk and high return or as a store of value for inflation. This might not sound important, but it’s incredibly useful for properly estimating when the crypto bear market will end. 

Bitcoin – Speculative Asset or Store of Value?

The two primary camps within the crypto market endlessly debate whether the cryptocurrency is a speculative asset or a store of value. There’s a third camp that makes the argument that Bitcoin is a currency, but that’s not particularly relevant because so few people actually use it as a currency. 

The store of value argument used to hold some merit when the price of Bitcoin went nothing but up. Unfortunately, this argument lost a lot of steam when the price of Bitcoin completely crashed as the economy of the United States began to weaken in early 2022. 

As it stands, the market appears to treat Bitcoin as nothing more than a speculative asset. If the market truly viewed Bitcoin as a store of value, then the price should have increased as the economies around the world began to slow down in early 2022. Of course, the price of Bitcoin fell faster and harder than the United States Dollar, which means Bitcoin is a pretty terrible store of value. 

Here’s When The Bitcoin Bear Market Will End

There are a few different camps for when the Bitcoin bear market will end. Obviously, no one can predict the future, so it’s important to take all these predictions with a grain of salt. Some people say it will end after the next Bitcoin halving (May 2024) others claim it will end once the economic recession becomes normalized while a small minority claim that it will end if/when the United States Dollar completely collapses. We will examine all these predictions in order to make our best estimate. 

Around May 2024

All the previous Bitcoin bear markets have ended within a year of a Bitcoin halving. For those unaware, a Bitcoin halving is a preprogrammed part of the Bitcoin mining program that cuts the reward for successfully mining a Bitcoin block in half. These halvings occur every 210,000 Bitcoin blocks, which is approximately four years. 

The halving causes a supply shortage, which causes the price to increase. This naturally has a tendency to end Bitcoin bear markets. 

The Economy Collapses Further

It’s no secret that the global economy is weakening. The United States is currently facing a massive inflation problem combined with supply chain issues. Prices for everything are going up while salaries are remaining the same. 

It’s causing a lot of problems to the average person. In fact, one reason that the price of Bitcoin collapsed so hard is that many people needed to sell their holdings in order to cover their expenses. 

This is one reason that people say the price of Bitcoin will rise once the economy further collapses or, more accurately, once the recession becomes more normalized. Basically, the beginning of the recession caused a lot of weak hands to sell their Bitcoin holdings. Things will likely pick back up for the cryptocurrency once all the weak hands have been cleared out of the market. 

The US Dollar Collapses

This theory is a little more out there on its face, but it does have some merit to it when examined more closely. The theory claims that the US Dollar is on a path for collapse and that Bitcoin will replace it as the currency of commerce once the collapse happens. 

Again, this sounds out there, but the dollar has seen unprecedented inflation in 2021 and 2022, which has caused some countries to consider moving away from using the dollar for commerce. Most importantly, oil exporting nations like Saudi Arabia are considering selling oil in currencies other than the United States Dollar. 

Will Bitcoin be one of those currencies?

It sounds crazy, but Bitcoin reaching a price of $60,000 sounded crazy when it was launched in 2009. The more likely scenario will be that Americans will begin holding their wealth in Bitcoin rather than US Dollars. There are some real world examples of people moving their wealth to Bitcoin because their local currency has collapsed. Examples include Argentina, Venezuela, and Iran.

Final Words

To answer the question, the Bitcoin bear market will likely end sometime around the halving in May 2024. But there will likely be a big run up in the price before that due to the weak economy and rampant inflation of the United States dollar. One thing is for certain – Bitcoin is not going to zero.