Opinion: The longevity of the bull run questioned as digital assets surge once more.

Disclaimer: The opinions expressed in this article are solely those of the author and do not reflect the views and opinions of crypto.news’ editorial team.

In 2016, Adam Curtis, a British documentarian, released a thought-provoking film called “HyperNormalisation.” The film critically examines the changing dynamics of power in the global system, particularly the unnoticed lack of power. Fast forward to 2024, and our international landscape is even more intricate and unstable than it was just eight years ago. The conflicts in Europe, geopolitical tensions in the Pacific, and military confrontations in the Middle East have raised strategic concerns about the future direction of our globalized world and who will assume leadership. This may seem unrelated to digital assets, but bear with me.

Let’s shift our focus to real-world assets rather than just the price of Bitcoin. International finance has long surpassed the nation-state and often finds its way back to offshore financial centers. Meanwhile, global companies have relied on their national identities, such as being recognized as American or Italian, to shape their reputation, positioning, and the level of protection they receive due to national interests. Think of Ford versus Ferrari. Regardless of whether this is good or bad, let’s accept it as an existing reality.

In the realm of digital asset markets, there are numerous reasons given for buying: as an inflation hedge, for democratization of access, for the potential of outsized returns, and for stability despite volatility. These reasons are subjective and vary depending on economic, geographic, sociological, gender, and even psychological factors. Consequently, different countries, genders, and individuals approach trading decisions and strategies differently. While the concepts of hedging, democratizing returns, and stability may be complex or questionable, underlying them are fundamental issues of trust, power, and accessibility.

Moving away from traditional finance, the issue of accessibility to digital assets is straightforward. Whether they are synthetic, technology-driven, backed by assets or commodities, they are accessible on a global scale. Barriers to trading have been eliminated, and the cost of entry has decreased. In the absence of economic opportunities at the national level, people worldwide have turned to more speculative assets than traditional bonds, equities, and real estate, which have become increasingly unaffordable. This shift is not only driven by a lack of economic opportunities and trust in financial systems but also by the belief in the potential of the digital economy, particularly through web3.

Trust is a significant concern, with trust in companies, governments, and the world in general being historically low. However, trust is being found in unexpected places, such as digital assets. Many believe that the economic system is stacked against them, with currencies being systematically devalued and national debts posing structural economic challenges. As a result, digital assets are seen as a way to mitigate these issues for individuals, rather than being limited to professional investors and businesses.

The recent decision by the United States Securities and Exchange Commission (SEC) to approve Bitcoin ETFs is significant for two reasons. Firstly, it officially recognizes digital currencies as an asset class in the eyes of the regulator of the world’s largest economy and financial markets, setting a precedent for others to follow. Secondly, it opens the door for traditional financial institutions to engage with altcoins as an alternative investment, thereby establishing an official gateway to TradeFi-led digital asset markets.

At its core, this is about powerful and influential financial institutions seeking to meet client needs, profit from trading, and participate in the digital asset economy. However, it is also a clash of power dynamics. The struggle for power is not just about market share but about controlling a global phenomenon—the erosion of centralized power structures in favor of a multi-polar system, of which digital asset markets are just a part. Admittedly, the value of digital asset markets is not yet comparable to leading equity markets, developed market GDPs, or overall global wealth. However, two important questions arise:

1. Do they need to be comparable in scale to have a significant impact?
2. What could prevent them from exponentially growing due to a single issue or moment in time?

The longevity of the current bull run depends on when one believes it started and the dynamics fueling it. While all bull runs eventually come to an end, the complexity of the recent surge is influenced by a multitude of factors, including power, trust, and accessibility. Moreover, the relationship between digital assets and real-world economics is just as complex, if not more so, and less understood than the relationship between traditional financial markets and the real world.

During recessions, it is expected that prices and demand decrease, and the appetite for risk assets declines. However, digital assets have experienced a period of expansion, even as economies worldwide face economic challenges, potential recessions, and power vacuums. Many experts anticipate this expansion to continue well into 2024 and beyond.

It is essential to remember that digital asset markets have yet to reach their previous peak in terms of mark-to-market value. However, the broader political-economic factors and the composition of the market have evolved since then. As utility increases, web3 develops, the deterioration of international systems persists, and traditional financial institutions enter the space with their motivations and intentions, the essence of digital assets remains unchanged and mysterious, even if the driving factors are becoming more visible.

Robert Quartly-Janeiro is the Chief Strategy Officer at Bitrue, a cryptocurrency exchange platform. His role involves refining Bitrue’s positioning, managing external relations, strategic planning, and driving growth during this critical time for the industry. With experience in investment banking, investment management, strategic advisory, and communications, Robert has worked with various asset classes, investment styles, geographies, and strategic challenges. He holds a Master’s degree in Business and Finance and a Bachelor’s degree in International Relations and Economics. Robert is a Fellow of the Royal Geographical Society (RGS) and the Royal Society for Arts, Manufacturing, and Commerce (RSA).