A reader commented: The bubble has been burst, allowing the crypto world to return to calm. The entire market is returning to a state of calm, which is actually a good thing and serves as a mirror to reveal the truth.
It's hard to say how other markets are doing, but I believe the crypto ecosystem should indeed return to calm. As investors, we should reflect on the various ambiguous and bizarre views and ideas that have accumulated over the years but were considered "normal."
Over the years, we often say that the bull and bear cycles of the crypto ecosystem last four years, and this "four-year" cycle is caused by Bitcoin's halving.
However, looking back at the past bull and bear cycles of Bitcoin and the crypto ecosystem, I think it seems more appropriate to separate the bull cycles of Bitcoin from those of the crypto ecosystem.
Before elaborating further, it is necessary to define what constitutes a bull market for Bitcoin and what constitutes a bull market for the crypto ecosystem.
My definitions for these two bull markets are quite simple and direct:
A bull market for Bitcoin is when Bitcoin's price breaks through its previous high.
A bull market for the crypto ecosystem is when Ethereum's price breaks through its previous high.
As long as it does not break through the previous high, I do not consider it a bull market.
Since Ethereum was launched in 2015, we will look at the bull markets of Bitcoin and the crypto ecosystem after 2015.
In 2016, Bitcoin underwent a halving, and in 2017, Bitcoin entered a bull market.
In 2017, the Ethereum ecosystem experienced its first major explosion since its launch: ICOs. This also led to Ethereum's price entering a bull market in 2017, guiding the entire crypto ecosystem into a bull market.
In 2020, Bitcoin underwent another halving, and in 2021, Bitcoin entered a new bull market.
The explosion of the DeFi ecosystem in 2020 and the subsequent explosions of NFTs, blockchain games, and other ecosystems in 2021 led to Ethereum's price entering a bull market, guiding the entire crypto ecosystem into another bull market.
In these two bull markets, Bitcoin's bull market and the crypto ecosystem's bull market progressed simultaneously. This phenomenon left us with a strong impression:
Bitcoin's bull market every four years must inevitably trigger a bull market for the entire crypto ecosystem. Bitcoin's price reaching new highs every four years must also bring about new highs for the entire crypto ecosystem every four years.
But we should think carefully:
What factors triggered Bitcoin's bull market?
What factors triggered the bull market for the crypto ecosystem?
The direct reason for Bitcoin's bull market seems to be the halving that occurs every four years.
The direct reason for the bull market in the crypto ecosystem, in my opinion, is the innovations within the Ethereum ecosystem, including innovations in applications, scenarios, and models.
However, is there any necessary connection between the two?
Or can we say that Bitcoin's halving must inevitably trigger the explosion of ICOs, DeFi, NFTs, and blockchain games within the Ethereum ecosystem?
I cannot see it.
I believe that in the past two bull markets, it was merely a coincidence that the crypto ecosystem experienced an explosion every four years, and these explosions just happened to resonate with Bitcoin's halving.
However, there is no necessary causal relationship between Bitcoin's halving and the explosive innovations in applications, scenarios, and models within the crypto ecosystem.
In other words, we cannot deduce that if Bitcoin's halving leads to a bull market, the crypto ecosystem will also follow suit.
This non-inevitable relationship has been fully reflected in this round of market conditions.
In 2024, Bitcoin will undergo another halving, and by the end of 2024, Bitcoin's price will reach a new high again.
But has there been a persistent and powerful innovation in the Ethereum ecosystem comparable to ICOs, DeFi, NFTs, and blockchain games in this round?
No.
Therefore, Ethereum's price did not break through the previous round's new high, let alone the vast majority of tokens in the crypto ecosystem.
If there is no necessary causal relationship between the two, then the biggest lesson we should learn is:
In the future, we should try to separate the trends and cycles of Bitcoin and the crypto ecosystem, and not assume that Bitcoin's bull and bear cycles necessarily correspond to the crypto ecosystem's bull and bear cycles.
Judging Bitcoin's bull and bear markets may still rely on the halving method every four years.
But to judge the cycle of the entire (Ethereum) crypto ecosystem, we should focus on the ecosystem itself and find new applications, scenarios, and models that emerge within it.
As long as these innovations appear, we should see the next bull market for Ethereum and even the crypto ecosystem; this cycle does not need to be fixed.
If there are no such innovations, the new bull market for the crypto ecosystem may still not come, at most only responding to various short-term stimuli with fluctuations, and will not lead to a truly strong bull market.
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