Is the Crypto Market Really Short on Money? Who Is Deciding the Next Bull Run?

The crypto market has continued to decline recently, and many investors have begun to think that there is no fresh capital left in the market. But I think a more accurate description is that the market is going through a period of liquidity contraction, investors sitting on the sidelines, and asset repricing.

To assess the next bull run, we need to focus on three sources of capital.

First, global liquidity. The Federal Reserve’s interest rate policy, the US dollar index, and the monetary conditions of major economies around the world determine the overall cost of capital in the market. When interest rates remain high and liquidity is tight, risk assets tend to face greater pressure. Conversely, if expectations of future rate cuts strengthen and financial conditions gradually ease, the crypto market may react first.

Second, stablecoin supply. USDT and USDC are important trading media and capital reserves in the crypto market. Changes in total stablecoin supply can help us assess whether the crypto market’s capital base is expanding. But it’s worth noting that stablecoin growth does not mean the funds will immediately be used to buy Bitcoin.

Third, institutional capital. Bitcoin spot ETFs, publicly traded companies’ holdings, and the allocation behavior of professional investment firms are shaping the structure of capital in the crypto market. Continued institutional inflows can bring in capital and may also strengthen long-term market confidence.

Therefore, I don’t think the crypto market is really out of money; capital is simply choosing new directions. The next bull run may require three conditions to emerge together: improving global liquidity, renewed growth in stablecoin supply, and a sustained return of institutional capital.

What’s truly worth watching is not short-term trading volume, but whether fresh capital begins to form a sustained trend.

What do you think will be the first signal of the next bull run: Fed rate cuts, stablecoin supply growth, or institutions resuming large-scale Bitcoin purchases?