What will be the catalysts and cycles for Crypto after the halving and ETF?
Insights from Coinbase researcher David Han
1. Cycle moves forward:
Historically, the peak after the halving occurs between 350 to 550 days after the event. Against the backdrop of halving expectations and the actual positive effects of ETFs, Bitcoin reached an all-time high more than a month before the halving. We expect Bitcoin to further advance the historical cycle trend; see Figure 1

2. New narratives post-halving:
Disruptive narratives in the cryptocurrency space typically emerge after the halving. Examples include ICOs after the 2016 halving and the DeFi summer of 2020 with Uniswap and Maker;

3. Narratives and funding become more decentralized:
The cost of blockchain space has never been cheaper, and the number of "things to do" on-chain has never been greater. The development costs and convenience for projects have significantly reduced, making the rotation of funds between various sectors of cryptocurrency more pronounced in this cycle;

4. Liquidity issues:
On one hand, primary market financing has shrunk. The private equity market generally contracted in 2023, with the total funds raised by venture capital funds reaching the lowest level in 6 years, declining by 60% since 2022. On the other hand, spot ETFs are undoubtedly one of our current important avenues for external liquidity. These capital inflows are limited to $BTC (and possibly $ETH in the future), and are unlikely to flow further down the risk curve, maintaining a high Bitcoin market share;

5. Stablecoins and altcoin season:
The main means of liquidity for altcoins (beyond leverage) comes from net growth in stablecoins. Currently, stablecoins are overall approaching previous historical highs, as shown in Figure 2