Why the Next Crypto Bull Run Will Be Like Nothing We've Ever Experienced

Even the most novice degens know that the only rule that applies to cryptocurrency markets is that there are no rules. Not even the world's brightest minds can outpace the mayhem that is the world of digital assets. One minute, Michael Saylor and Microstrategy could be live on CNBC discussing their latest billion-dollar Bitcoin purchase, and the next, Jim Cramer could be telling America that he'd never touch Bitcoin with a ten-foot pole, only a couple of weeks after calling it digital gold — it's crazy.

1. Dumb money following smart money is still dumb

One of the most common mistakes prospective investors make, regardless of the target market, is outsourcing critical thinking skills instead of developing their own. Most investors would rather follow someone else's investment decisions instead of doing their own analysis.

That's not to say that there is anything wrong with seeking the guidance of someone with more experience; however, it's important to remember that finances, goals, and risk appetite vary from person to person. Blindly following anyone's advice, no matter who they are, is a surefire way to make losing trades. Instead, cultivate the ability to ascertain the fair market value of an asset so that you can capitalize on whatever arbitrage opportunities exist within a given market.

During times of prosperity, it's quite common for novice investors to fall victim to scams. Whether it's a personal security issue gone wrong that leads to a complete loss of funds or being fooled into investing heavily in a meme coin pump-and-dump, it's important to remember that there's no such thing as easy money. Being equipped with the tools to properly evaluate the viability of an investment on its merit alone is the biggest key to financial freedom.

1. Crypto's tiny!

As I write this article, the crypto market capitalization (i.e., the total size) is hovering around $1 trillion. By all accounts, this is an outrageously large number for an asset class still unacknowledged by some of the nation's elite. However, it pales compared to the vast majority of other asset classes. For context, the US stock market cap is about $47 trillion, while Apple ($AAPL) alone, with a market cap of $3 trillion, is roughly 3x larger than the entirety of crypto.

Should crypto's mission to update our archaic financial system as well as financially connect the most economically ostracized parts of the world succeed, the potential upside is undeniable. For example, the recent progress we've seen in developing a Bitcoin spot ETF will drastically increase opportunities for the everyday person to gain crypto exposure without having to take on the operational risk of self-custody.

There is an astronomical disparity in the global sentiment towards digital assets. Namely, we've seen more liberated financial markets overseas, like the United Emirates or various countries in Latin America, embrace crypto with open arms while many Americans remain emotionally scarred by the narratives that have been weaponized against them to discourage participation.

According to a study done by the Pew Research Center, 75% of Americans are not confident in the safety and reliability of crypto. This stark contrast sets the stage for rapid price swings. It brings to light the potentially misaligned incentives that might've come into play amidst a weakening dollar and ever-changing geopolitical landscape.

1. Utility

Perhaps the most significant change that has occurred over the last market cycle is the influx of use cases that have finally come to fruition. The overwhelming success and adoption of non-fungible tokens (NFTs) in the world of art and ticketing and the likes of Gucci, El-Salvador and the world's most prestigious brands and countries deeming cryptocurrency legitimate currency, Web3 is no longer possible; it's happening.

Various breakthroughs in decentralized technologies have largely addressed the initial limitations of many decentralized protocols. The emergence of proof-of-stake and its many derivatives have enabled builders to put decentralized technologies in the hands of consumers and drastically expand their applications. And while most degens have been of the opinion that the world of distributed ledgers is 'winner takes all,' it now seems that the broader Web3 community is interested in finding ways to build bridges to bolster collaboration, an essential ingredient for mass adoption.