- Bitcoin is on the edge of a bear market, if past cycles are to go by, the co-founder of the Huobi exchange has said.
- Du Jun told CNBC the next bull cycle is unlikely to come around before 2025.
- Bitcoin has fallen since November, from $69,000 to below $38,000 on Monday.
Bitcoin is likely entering a
and the next major rally probably won’t come until late 2024 or early 2025, according to the co-founder of one of the world’s biggest crypto exchanges.
Huobi co-founder Du Jun told CNBC on Sunday that bitcoin prices are often influenced by a technological change in the cryptocurrency’s network, called “halving”.
Halving is a key feature of bitcoin, and refers to a cutting in half of the amount of cryptocurrency that so-called miners receive as a reward for validating transactions.
The last halvings occurred in 2016 and 2020, and crypto analysts expect the next one to take place in 2024.
It occurred in 2017 and in 2021, and so the next one is likely to happen around a year after the 2024 halving, Du said. The idea is that the halving reduces the supply, boosting the price.
“If this circle continues, we are now at the early stage of a bear market,” Du told CNBC’s Arjun Kharpal, according to the network’s translation. Du co-founded Huobi, a cryptocurrency exchange originally based in China.
Yet he added: “It is really hard to predict exactly, because there are so many other factors which can affect the market as well — such as geopolitical issues including war, or recent COVID.”
“Following this cycle, it won’t be until end of 2024 to beginning of 2025 that we can welcome the next bull market on bitcoin.” A bull market is a period when prices consistently go up, whereas a bear market is the opposite.
Crypto prices have fallen since November, when bitcoin hit a record high of close to $69,000. The cryptocurrency was down 1.8% to $37,683 on Monday morning on the Coinbase exchange.
Both cryptos and tech stocks have been hit hard by the Federal Reserve’s plans to hike interest rates sharply in 2022, given that both asset classes were boosted by central bank stimulus over the previous two years.
Some investors are expecting another “bitcoin winter” – that is, a period where prices fall and don’t recover for a year or more. The last such winter occurred between late 2017 and the middle of 2019, when bitcoin fell from around $20,000 to below $4,000.
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