Investing in bear market

Like any market, the cryptocurrency market follows cycles of growth and correction. Since 2011, the evolution of this market has been driven by the proliferation of blockchain use cases, and a fortiori, crypto-currencies. It is essential to understand the impact of technology and its stage of development, to analyze the different cycles of the cryptocurrency market.

Cycle 1 - Payment (2011 to 2013)

The first major cycle of the cryptocurrency market spanned from 2011 to 2013. It was during this bull market that the total valuation of the cryptocurrency market exceeded $1 billion for the first time. This is where the most natural application or "killer app" of blockchain technology is revealed: disintermediated payment (Bitcoin). At this stage, Bitcoin represents almost the entire market (99% of its valuation).

Bitcoin 2011 to 2013 - BraveNewCoin Liquid Index - 1W - 11/2022

Cycle 2 - Decentralized applications (2013 to 2017)

The second cycle will have seen the appearance of protocols intended to deploy decentralized applications (dApps) whose operation is based on smart contracts. During the summer of 2015, the Ethereum protocol was launched, which sparked the upward movement observed in 2017, through the deployment of ICOs. Here, we can see that during this cycle, the evolution of blockchain technology through smart contracts has allowed it to present a new offer of inescapable value.

Interestingly, it is during this bull market that Altcoins (any cryptocurrency other than Bitcoin) will capture a significant share of the market. We can observe that the market share held by Bitcoin then goes from over 98% to less than 36.5%.

Bitcoin 2013 to 2017 - BraveNewCoin Liquid Index - 1W - 11/2022

Cycle 3 - Decentralized finance & non-fungible tokens (2018 to 2021)

This cycle which has just ended was an opportunity for the various projects of the previous cycle to work on their offer and consolidate their technological innovation. At the same time, the continuous development of smart contracts has allowed the emergence of new sectors: that of Decentralized Finance (DeFi) and non-fungible tokens (NFTs). It is mainly through the many iterations and the strengthening of the robustness of smart contracts, that concrete offers in these new sectors have appeared and subsequently attracted a multitude of users, giving impetus to a new bull market.

This cycle could also have established the capitalization taken by Altcoins during the 2017 bull market.

Crypto Total Market Cap - CryptoCap - 1W - 11/2022

Cycle 4 - DAG, Decentralized Cloud, Decentralized Insurance, Decentralized Identity (2022 to 2025)

All of these new sectors and sub-sectors are exploring new use cases for blockchain technology. Although in their infancy, some of them have been studied by different companies for several years already. We can already see the breakthrough of the DAG, dCloud, Insurance and DID sector, with projects with capitalization exceeding hundreds of millions of dollars. It is both these new sectors as well as the maturation of those from previous cycles that will be the source of the next bull market.

Crypto Total Market Cap - CryptoCap - 1W - 11/2022

Iceblock: a cyclical approach

Our team derives its portfolios from fundamental analysis. However, it is positioned in relation to the deep cycles of the market, studied over an extended period of time. We analyze the different cycles to know their technological origin and the innovation that allowed the capitalization of the market. The growth of blockchain use cases is driving the capitalization of the cryptocurrency market, rather than pure speculation.

* Required fields
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.