3 Things That Will Trigger The Next Bitcoin Bull Run
The next bitcoin bull run could be just around the corner. The bull market could start for no specific reason. Or, it could start after a certain trigger.
What things will trigger the next bitcoin bull run? Which events could launch bitcoin upward after a prolonged bear market? Brave New Coin recently answered that question.
Here are the three most likely things that could trigger the next bitcoin bull run:
The Launch Of A Security Token Ecosystem
Brave New Coin believes the launch of a security token ecosystem could spur bitcoin into a bull market. A security token ecosystem would include tokenized securities – like traditional financial assets stored on the blockchain and transferred as easily as digital tokens.
Today’s coins aren’t technically securities. Last year, ICOs were selling tokens that replicated securities and functioned similarly to shares, but they weren’t actual security tokens.
In the future, companies could sell real, regulated shares on security token marketplaces. Instead of today’s mess of different regulations, we could have legitimate tokenized securities trading available worldwide.
Here’s how Brave New Coin explains the potential impact of a security token ecosystem:
“This is why security tokens have the potential to be ‘game changers', essentially becoming the ‘ICO' model and utility token evolution, that in reality, the market always intended to interact with.”
Essentially, a security token ecosystem would be a whole new economy. It could change the way companies crowdfund. It could reinvent the concept of the stock market:
“While blockchain equity tokenization could conceivably reignite the lagging ICO investment space, it has the potential to go farther —as a viable alternative to IPO or venture capital funding — maintaining the advantages of accessible liquidity and blockchain payment verification of the ICO model, with added legal compliance and transparency.”
A security token ecosystem could involve much more than just stocks and bonds: it could involve tokenized real estate trading, tokenized fine art trading, and more.
What Needs To Happen For A Security Token Ecosystem To Launch?
Several things need to occur for a security token ecosystem to launch. Here are some things that could trigger its launch:
- tZero, Securitize, and Polymath are already building frameworks for tokenizing equity; in fact, these platforms have already laid the foundation for the launch of a first wave of security tokens for decentralized autonomous organizations (DAOs)
- There are legal and regulatory concerns with how securities trading could work
- Real estate, works of art, and intellectual property would have to be “divided” in some measurable and equitable way
- Ordinary investors would need to “buy in” to the concept of tokenized assets
Ultimately, a security token ecosystem would bring greater transparency to investors. We saw hints of the power of a token-based economy with the rise of ICOs in 2017. The real token revolution, however, could be right around the corner – and that revolution could spark a bitcoin bull run.
The Emergence Of Bakkt And New Institutional Futures Markets
Futures trading on bitcoin launched in December 2017. Today, there are several marketplaces for bitcoin futures, although institutions are wary to get involved.
That could change with the launch of Bakkt, the crypto startup backed by ICE, the parent company of the New York Stock Exchange. Bakkt also has the support of Starbucks, Microsoft, and other major American corporations.
Bakkt’s launch has been pushed back to January 24, 2019 (at least). When launched, however, Bakkt could create a huge bull market surge across the crypto space. Institutional investors could pour money into crypto using the safe on-ramp provided by Bakkt.
Bakkt’s futures contracts will have a huge difference from today’s bitcoin futures contracts: Bakkt will actually purchase all bitcoin. When Bakkt receives a contract order, they’ll purchase real bitcoin. This should secure more effective price discovery – especially when compared to the leveraged bitcoin futures contract options available today on Bitmex, CME, and Cboe. It will also mean that bitcoin will need to be purchased at market rates, propping up demand and creating better liquidity – all of which is good for the future of bitcoin.
The SEC Approves A Bitcoin ETF
If you ask the average crypto fan what would trigger a bitcoin bull market, many of them would mention the much-anticipated bitcoin ETF approval.
The United States Securities and Exchange Commission (SEC) has received dozens of applications for bitcoin exchange traded funds (ETFs). To date, the SEC has denied all of these ETF proposals.
There are several ETF proposals making their way through the system right now, however, that have a good chance of being approved. With each ETF rejection, the SEC has outlined the conditions needed for approval to take place.
Some see the launch of Bakkt as one reason why a bitcoin ETF will be approved within a year. Bakkt will create effective price discovery in bitcoin while reducing manipulation. Manipulation and insufficient investor protection are two of the SEC’s major concerns with a bitcoin ETF. Bakkt could solve both of these concerns at launch.
The SEC could approve a bitcoin ETF in the near future. The SEC has at least two pro-crypto commissioners on its board – including “CryptoMom” Hester Peirce.
The most promising bitcoin ETF going through the SEC approval process right now is the VanEck SolidX Bitcoin Trust ETF. However, ETFs from Direxion, ProShares, and others are also making their way through the system.
The moment any of these ETFs is approved could be a historic day for bitcoin. The approval of an ETF would make it easy for investors to purchase a share of bitcoin. These ETFs would then use investor money to purchase bitcoin from the market.
Other Things That Could Trigger A Bitcoin Bull Run
The three events above are the most likely events that would trigger a bitcoin bull run. However, there are a number of other scenarios that could occur and similarly trigger a bull run.
The United States could declare bitcoin an official currency, for example.
Or, it could be announced that Apple is launching a hardware wallet for cryptocurrencies.
Both of these events would likely trigger an enormous bitcoin bull run – but neither seems likely to occur in the near future.
Will the events above trigger bitcoin to new heights in 2019? Or are we going to have to wait until 2020 for the next bitcoin bull run to start? It’s also possible, of course, that this bitcoin bear market doesn’t quit, and that we’ll never see bitcoin rise above $4,000 again.