Viewpoint: Based on four major logical deductions, the encryption bull run will start in Q2 2026.

Author: rektdiomedes

Compiled by: Tim, PANews

Has the crypto bull market ended?

In fact, I believe that if we look at the overall market situation rationally, the current state is completely reasonable.

Firstly: The price of gold is skyrocketing, far exceeding that of stocks and cryptocurrencies.

This is because major sovereign countries (such as China, India, Russia, and to some extent the United States itself) are driving up gold prices as part of a strategic adjustment for countries gradually moving away from using U.S. Treasury bonds as the “world reserve asset.”

This is primarily driven by two major factors: the first is the widespread fiscal extravagance in the United States, and the second is the actions taken a few years ago by the U.S. to freeze Russia's foreign exchange and treasury reserves, which completely exposed the fact that U.S. treasury bonds can no longer be regarded as a “neutral” reserve asset.

Multiple macro observers, such as Doomberg, Luke Gromen, and my friend Noah Seidman, have elaborated on the above viewpoint: When Russia, as well as China and India, witness the United States implementing a freeze in this manner, it can be logically deduced from a game theory perspective that these countries will make a rational choice to increase their gold holdings and reduce their U.S. Treasury holdings.

Secondly: U.S. stocks are rising, but have not yet reached a crazy level.

This is because the US stock market is essentially an automated Ponzi scheme driven by the automated capital flows of 401k pensions and the passive investment industry complex, as Mike Green has articulated for years.

All ordinary nine-to-five office workers across the country, regardless of price or other variables each month, will automatically invest their retirement funds into the main indices, so these indices will naturally rise over the long term.

In addition, the US stock market is increasingly becoming the “world stock market” as the global economy is becoming more and more online. It is also reasonable that the largest “global companies” such as Amazon, Nvidia, Apple, and Microsoft all come from the United States, as it is the best arena for capital formation.

This situation is likely to persist until this trend develops further, and cryptocurrency itself will become the dominant stage for global capital formation.

Thirdly: Due to high interest rates, the U.S. real estate market (as well as the real estate markets of most developed countries with mortgages) remains in a state of complete “freeze.”

Currently, the U.S. residential real estate has $37 trillion in home equity, but the problem is that this equity is nearly inaccessible. No one is willing to cash out and refinance at rates higher than their existing mortgage rates, nor are they willing to sell their current homes and then apply for new mortgages at higher rates. Furthermore, they are reluctant to take on outrageously high (reaching double digits) home equity lines of credit.

Its fourth point: Cryptocurrency has rebounded from the lows of 2022, which were caused by the interest rate hike cycle and the subsequent collapses of institutions like LUNA and FTX, and has now largely returned to normalcy.

Our scale has expanded by about 25% compared to the peak period of 2021, but it is still not comparable to NVIDIA, only accounting for one-tenth of the total market value of gold.

The reason we have not yet seen any similar “bull market” conditions is that the macroeconomic situation has not yet experienced large-scale liquidity injections similar to those in 2021.

Most people view stimulus checks and “universal stay-at-home” as the main drivers of the bull market in 2021, but as I mentioned before, I believe the real reason was actually the large amount of extractable home equity at that time.

This is the way the legendary “Cardano dad” obtained additional investment funds during the last bull market; they watched Hosk's videos on YouTube and then aggressively pressed the buy button on Coinbase.

He either sold the house and reinvested the net asset value obtained, refinanced for a cash withdrawal, or applied for a home equity line of credit.

Conclusion

Given all the above circumstances, the current performance of the asset class is completely reasonable.

In the specific context of the cryptocurrency sector, we should anticipate that the real “bull market” will start in the second quarter of 2026, when interest rates will finally drop to a sufficiently low level, beginning to “unfreeze” the U.S. real estate market.

At this point, I believe we will see a very positive price trend for about six quarters.

Before the fourth quarter of 2027 or the first quarter of 2028, the aftermath of the aforementioned market frenzy and the initial emergence of panic ahead of the elections (imagine figures like Mamdani leading the Democratic primary on a national scale) will trigger a wave of sell-offs, leading to another round of a “bear market.”

Therefore, I believe that the “bull market” in the cryptocurrency market has not yet ended, and I don't even think that the “bull market” has started.

I will continue to accumulate coins, take action, and focus on the second quarter of next year.