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Every event requires a catalyst \u2013 <\/span>a spark that will precipitate the explosion that comes next. It\u2019s been that way since the Big Bang, and crypto is no different.<\/p>\n When Bitcoin<\/a> enters full bull season again, the breakout will occur overnight, and yet the seeds that triggered it will have been planted long ago.<\/p>\n A plethora of macro and micro forces will dictate the timing, ferocity and duration of the next bull run \u2013 <\/span>that giddy phase when a market enters \u2018up only\u2019 mode and assets good and bad post-double-digit gains just for fun.<\/p>\n We don\u2019t know the day or hour when crypto<\/a> will break bullish. But we know that it\u2019s coming, as sure as night follows day.<\/p>\n And when it does occur, odds are that the following factors will play a pivotal part in crypto\u2019s stellar story.<\/p>\n The ETF<\/strong><\/p>\n The first driver of Bitcoin\u2019s ascent \u2013 <\/span>and where BTC leads the rest of the market inevitably follows \u2013 <\/span>is the approval of an ETF (exchange-traded fund).<\/p>\n Institutions have been trying to get one over the line for years, but the SEC has always said no, citing the potential for market manipulation.<\/p>\n But now BlackRock\u2019s decided<\/a> it wants one, and what the investment giant wants, it invariably gets.<\/p>\n In recent months, CEO Larry Fink has begun saying<\/a> nice things about Bitcoin while its ETF application grinds its way through the torturous approval process.<\/p>\n Meanwhile, other players have gotten in on the act, filing and refiling their own initiatives.<\/p>\n The general consensus is that an ETF will be approved sooner rather than later, and that when it occurs, it will be a major driver of greater price discovery for BTC and other crypto assets.<\/p>\n The approval of a Bitcoin ETF means that pension funds can get direct exposure to crypto for the first time.<\/p>\n It also validates crypto as an asset class, opening the door to additional ETFs, with Ethereum<\/a> (ETH) the likeliest coin to be green-lighted next.<\/p>\n As for when the mythical Bitcoin ETF is likely to occur, odds are one will be approved within H2 or by Q1 of 2024 at the very latest.<\/p>\n The halvening<\/strong><\/p>\n If crypto still hasn\u2019t kicked into high gear by Q1 of next year, don\u2019t despair \u2013 <\/span>the next potential driver will be imminent.<\/p>\n Next May, Bitcoin will undergo its four-yearly halving schedule \u2013 <\/span>or \u2018halvening<\/a>\u2018 as it\u2019s commonly known. This is when the block reward issued to miners reduces by half.<\/p>\n At present, 6.25 BTC are issued approximately every 10 minutes. From May, this reward will diminish to 3.13 BTC.<\/p>\n In real terms, the reduction in new supply won\u2019t have a major effect on the market \u2013 <\/span>half a million dollars of BTC being sold every hour is easily absorbed.<\/p>\n The real significance of the halvening lies in the psychological effect it exerts.<\/p>\n For one thing, it\u2019s a calendar event that can be pre-traded and post-traded \u2013 <\/span>empirically BTC tends to rise a few months after the halvening.<\/p>\n For another thing, the reduced issuance rate reinforces the scarcity meme. It\u2019s a tangible reminder, in other words, that there will only ever be 21 million Bitcoins and demand for the remaining supply is going to intensify.<\/p>\n Whatever reasons one may postulate for the halvening\u2019s effect on price, there\u2019s no denying there\u2019s a correlation between the two. The only matter to be decided is when it kicks in \u2013 <\/span>pre- or post-halvening.<\/p>\n The regulating<\/strong><\/p>\n Crypto regulation is often described in a negative context, as something to dampen the market rather than ignite it.<\/p>\n This is understandable since much of the attempts at regulating the industry, particularly emanating from the US, have been overzealous in their reach and risk stifling innovation.<\/p>\n The SEC under its current chair Gary Gensler<\/a> has come in for particular criticism for its desire to declare major crypto assets as securities while arguably doing little to protect investors, which is the agency\u2019s remit.<\/p>\n Be that as it may, regulation is an attempt at providing clarity and delivering investor protection, and when measured, it can achieve these aims.<\/p>\n To be fair to regulators, crypto is an industry that\u2019s constantly shape-shifting, and no sooner have policymakers wrapped their heads around one concept \u2013 <\/span>algorithmic stablecoins or DeFi \u2013 <\/span>than its participants have moved on to the next use case.<\/p>\n Crypto is a big target, but it\u2019s also a moving one that\u2019s proven hard to nail.<\/p>\n Nevertheless, there are signs emerging that better regulation is on the way \u2013 <\/span>both in the US and Europe \u2013 <\/span>that will support greater participation from consumers and institutions alike.<\/p>\n Stablecoins and digital payments are receiving recognition<\/a>, while the UK has declared<\/a> its intention to provide greater consumer protection.<\/p>\n In April, the EU followed suit, implementing<\/a> a harmonious framework for digital asset regulation.<\/p>\n Creating consumer FOMO is the last thing on regulators\u2019 minds \u2013<\/span> they have no desire to spark a digital gold rush.<\/p>\n Regardless, there will reach a point at which the most egregious proposals have either been turned into law or rejected in favor of more benign alternatives.<\/p>\n When that happens, confidence will return to the markets, clearing the way for a move up and potentially a multi-year bull market.<\/p>\n It may be the halvening, it may be the BlackRock ETF or it could be more favorable regulations that kickstart the next bull run.<\/p>\n Whatever the spark, the resulting conflagration is inevitable. Like a dry forest in a heatwave, it\u2019s merely a case of when.<\/p>\n Gracy Chen is the managing director of the crypto derivatives exchange Bitget<\/a>, where she oversees market expansion, business strategy and corporate development. Before joining Bitget, she held executive positions at the fintech unicorn company Accumulus and Foxconn-backed VR startup XRSPACE.<\/span><\/p>\n \u00a0<\/p>\n
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