Is the crypto market really short on money? Who is determining the next bull market?

The crypto market has continued to fall recently, and many investors have begun to believe that there is no longer any new capital entering the market. But I think a more accurate description is that the market is going through a period of liquidity contraction, investors staying on the sidelines, and asset repricing.

To assess the next bull market, 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 reserves of capital in the crypto market. Changes in the total stablecoin supply can help us gauge whether the crypto market’s capital base is expanding. But it is important to note that stablecoin growth does not mean that the funds will necessarily be used to buy Bitcoin immediately.

Third, institutional capital. Bitcoin spot ETFs, publicly listed companies’ holdings, and the allocation behavior of professional investment firms are influencing 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 truly out of money; capital is simply choosing new directions. The next bull market may require three conditions to emerge together: improved global liquidity, renewed expansion in stablecoin supply, and a sustained return of institutional capital.

What is truly worth watching is not short-term trading volume, but whether new capital starts to form a sustained trend.

Which signal do you think will appear first ahead of the next bull market: Fed rate cuts, stablecoin supply growth, or institutions resuming large-scale Bitcoin purchases?