A popular Bitcoin miner in China predicts that the top cryptocurrency, Bitcoin, may become bearish in the summer period of 2022 as the traditional economy recovers from the Covid-19 pandemic. However, institutional interest may intervene.
In a recent interview with China-based crypto media journalist—Wu Blockchain—Jiang Zhuoer asserts that multiple studies have shown that Bitcoin’s market growth might begin slowly in autumn this year.
This prediction coincides with the estimation as to when COVID-triggered economic recovery plans will start being effective. He adds that when the traditional economy recovers, investors will turn to the “normal” economy, which will take away attention from cryptocurrencies. He also points out that there has not been any significant Bitcoin purchase after Tesla revealed its enormous $1.5 billion purchase.
Meanwhile, Jhang’s opinion corresponds with predictions based on the previous market cycles, which suggests that Bitcoin bull markets traditionally only last around two years.
Institutional interest may rescue Bitcoin
Despite the bearish prediction, Jhang also points that institutions could come to Bitcoin’s rescue, as several institutions are ramping up their crypto activities to support increased demand.
Earlier this year, America’s oldest bank announced its plans to launch a cryptocurrency custody service. Goldman Sachs also conducted a client survey. The results revealed that 40% of its clients are already exposed to cryptocurrencies. In response, the banking giant re-opened its crypto trading desk.
All these suggest that institutional interest is still present and potentially effective, even if not publicly announced. And the number of exchange-traded funds (ETFs) is also on an uptrend. This is a strong indicator of institutional interest as traditionally, only large investors can use them to invest in Bitcoin.
Expect a New Cycle?
While these developments are expected in a growing market, there are also suggestions from the crypto community that there may be a new cycle for the Bitcoin market. Traditionally, a bull cycle might last just a few years before entering a corrective phase. However, Jhang believes that the institutional interest this time could prolong the optimism in the market.
And in turn, this would sustain the market’s demand, which, combined with the reported cryptocurrency supply shortage, could push the market to new heights.