The recovery and growth of the cryptocurrency market are driven by the interaction of macroeconomic factors, behavioral economics, and fundamental market mechanisms. The main factors are:
1. Monetary policy: Changes in central bank interest rates affect the cost of capital. A decrease in the real risk-free rate (R_f) increases the present value of risky assets such as Bitcoin, according to a discounted cash flow (DCF) model.
2. Efficient Market Hypothesis (EMH): Institutional investors add liquidity, reducing arbitrage opportunities, which reduces volatility. This increases trust in the market by retail investors.
3. Cyclicality and deflationary issuance: The Stock-to-Flow (S2F) model, where S2F = Stock/Flow, shows a price increase due to a reduction in supply (Flow) after the halving. This is confirmed by the effect of the asset's scarcity in conditions of increasing demand.
4. Technological progress: Innovations such as scaling optimization (e.g., Lightning Network) improve the functionality of blockchain networks, increasing utility and attracting new users. According to Metcalfe’s law (V ∝ n^2), the growth of the number of network participants exponentially increases its value.
5. Behavioral Economics: Increased investor confidence through overcoming fear of uncertainty (FUD) and transitioning to herd behavior stimulates additional investment in assets.
In short, the recovery of the cryptocurrency market is the result of a dynamic interaction of economic forces, where demand, supply, institutional support, and technological innovation create the foundation for long-term growth.