The new US President Trump has previously promised to establish a strategic reserve of Bitcoin. Wyoming Senator Cynthia Lummis also proposed a Bitcoin Reserve Act earlier this year, requiring the United States to purchase 1 million Bitcoins. At the same time, similar proposals have also appeared in Russia, Thailand and Germany. A Bitcoin reserve competition may be beginning.
Is a super cycle coming?
Cointelegraph reported that if governments around the world rush to build up Bitcoin reserves, some market participants are optimistic that the "boom-bust cycle" of Bitcoin's halving every four years will be broken and the currency market will enter a "super cycle" of continuous growth.
The founder and economist Alex Krüger of the macro digital asset consulting firm Asgard Markets stated that the outcome of the U.S. election leads him to believe that Bitcoin is very likely to enter a super cycle. He believes that Bitcoin's unique situation can be compared to gold, which soared from $35 per ounce to $850 between 1971 and 1981 due to then-President Nixon's termination of the Bretton Woods system, decoupling the U.S. from the gold standard.
Alex Krüger did not rule out the possibility of Bitcoin experiencing a bear market like in past cycles, but he urged cryptocurrency investors to 'stop comparing this cycle with past cycles,' as this time may be different.
The dangers of the super cycle theory
However, reports also indicate that during each Bitcoin bull market, there has been a narrative of 'this time is different,' each backed by narratives surrounding mainstream and institutional adoption, but ultimately culminating in price crashes and entering a long bear market.
For example, during the 2013-2014 bull market, the super cycle theory suggested that Bitcoin would become a substitute asset for fiat currency, attracting international attention; in the 2017-2018 cycle, there was hope for mainstream financial adoption of Bitcoin; in the 2020-2021 cycle, when tech companies like MicroStrategy, Square, and Tesla bought Bitcoin, the super cycle theory posited that many tech companies would follow suit.
However, in every cycle, the narrative of a super cycle ultimately did not materialize. Therefore, betting on the super cycle theory could be very dangerous. Chris Brunsike, partner at the venture capital firm Placeholder and former head of blockchain products at ARK Invest, described the Bitcoin super cycle as 'a collective fantasy.'
However, if the U.S. Bitcoin reserve bill passes, it could trigger a race among countries to accumulate Bitcoin. Basel Ismail, CEO of Blockcircle, stated that the passing of this bill would be 'one of the most bullish events in cryptocurrency history,' as 'it will catalyze a wave of competition to buy Bitcoin.'
Therefore, veteran cryptocurrency investor Chris Dunn still believes the super cycle is coming. He is optimistic about the FOMO-based competitive buying frenzy among countries, which could completely change the current cryptocurrency market cycle.
