We've Had Crypto Bull Runs. We Haven't Had a Utility Bull Run

[00:00:00]One of the things I enjoy most about studying financial markets is that every so often you come across an idea that completely changes the way you look at something you've been seeing for many years. For me, one of those ideas is the distinction between a traditional crypto bull run and what we would consider a genuine utilitydriven bull market. Now, sometimes I think the biggest misconceptions when it comes to investing and financial markets don't always come from what people don't know, but from the assumptions they don't even realize they're making. Now, one assumption I hear constantly and that I've heard for many years in the digital asset and crypto market is that every bull market is simply another version of the last one. and that pretty much the same forces ultimately drive all bull markets. Now, it's interesting because the terms bull run and utility bull run are often used very interchangeably, almost as though they're describing the exact same thing when they're not.

[00:01:17]Personally, I don't think they are the same thing. In fact, I would argue they're fundamentally different market environments driven by completely different forces. More importantly, I actually don't believe we've ever experienced a true utilitydriven bull run yet, despite the incredible bull markets we've witnessed throughout the past decade and over multiple cycles.

[00:01:47]And now I know that statement may sound surprising to many of you at first because crypto and the markets have pretty much already gone through multiple massive cycles where we saw massive price appreciation. We've seen Bitcoin reach new all-time highs, other cryptocurrencies as well. We've seen entire sectors emerge. We've seen billions of dollars flow into this industry and in this market. And we've watched countless cryptocurrencies and digital assets experience these extraordinary gains and massive price appreciation in prior cycles. But I think once you understand the distinction between a liquiditydriven bull market and a utility driven bull market, it really changes the way you view not only where this market has been in the past, but also where it is today, where we are in the cycle, and why the most significant phase of this industry's evolution may still lie ahead of us. Now, before we can really understand what a utilitydriven bull run would actually look like, I think it's important to understand first what we've actually experienced throughout prior cycles throughout crypto's history.

[00:03:14]Every major bull market that we've seen so far has been primarily driven by these major forces. That's liquidity, speculation, market psychology, which is human psychology, and capital flows, which is capital rotation. Now, that's not a criticism of the market. It's simply the reality of how emerging markets and asset classes behave and evolve before they reach maturity phase.

[00:03:44]When liquidity conditions improve and capital begins flowing into risk assets, markets naturally begin moving higher and pricing that in. This typically happens when monetary conditions begin to become less restrictive. Whether that's through interest rates being lowered, the end of tightening cycles, increased liquidity in the financial system, and it begins circulating looking for better rewards or simply the market anticipating the financial conditions are about to become much more favorable. Okay. As investors regain that confidence and become more willing to take risk, what happens is capital begins moving further out along the risk curve in search of much higher returns and better opportunity. This is where we typically see the progression of a crypto cycle really begin to unfold.

[00:04:49]It's at that stage and we've seen this play out cycle after cycle in the past for over a decade. Capital usually flows into Bitcoin first as it's the most established leading cryptocurrency with the biggest market cap and the gateway to the rest of the crypto market. As confidence increases and as the cycle matures, that capital begins rotating into larger cap cryptocurrencies and eventually into smaller cap projects with even higher returns and higher risk and investors become increasingly willing to take on more risk in pursuit of higher returns. So, it goes even further down the risk curve. This is the environment where narratives become much stronger. Speculation begins to accelerate further. Retail participation and involvement begin to increase and prices can move dramatically higher and faster across the broader crypto market.

[00:05:52]We've seen this every cycle. However, the same cycle that drives markets higher eventually creates the conditions for the reversal. Because when investors begin to recognize that monetary conditions may remain restrictive or liquidity is about to become tighter or the credit cycle is shifting or speculation has simply become too overextended.

[00:06:21]Risk appetite starts to decline and capital leaves the market quickly.

[00:06:26]capital begins leaving these areas of the market that carry the most risk with the most reward. And historically, the highest beta assets in the crypto market tend to feel that pressure first and they sell off first. In crypto, that usually means smaller cap and more speculative cryptocurrencies are actually impacted first and the most because they benefited the most during the expansion phase of the cycle.

[00:06:55]The same risk appetite and liquidity that drove the strongest gains on the way up can also accelerate the downside when conditions begin to shift. And that's always what happens in traditional bull markets. This is essentially the market cycle we've experienced throughout crypto's entire history. Now, that does not mean fundamentals don't matter. They absolutely do, especially over longer periods of time for the future. Projects with stronger technology, realworld application, institutional interest, real utility, sustainable ecosystems are generally positioned much better than projects built purely on nothing but speculation. But it's important to separate the underlying quality of a project from what is actually driving that price appreciation at any given moment. A project can have incredible technology and legitimate long-term growth potential, but if liquidity is not flowing into the market and into that asset, that utility may not be reflected in price. Conversely, during periods of extreme speculation, assets with very little adoption can still experience massive price increases simply because capital is flowing into the entire sector. Kind of like what happened with Dogecoin and memecoins and Pepecoin. That's because markets, especially emerging markets and asset classes that are new, often price in expectations before reality catches up.

[00:08:49]Investors are not only buying what exists today. They're buying what they believe could exist in the future. Now, before I explain why I believe we haven't reached that stage of a utilitydriven bull run yet, I want to quickly answer one of the questions that I get frequently. Where do I personally buy and hold the portion of my digital asset portfolio and my cryptocurrencies that I intend to sell at some point in the future when prices get overextended?

[00:09:24]And what exchange do I trust? What do I use the most? Now, personally, I use and trust the most for that specific reason.

[00:09:32]My partner is at iTrust Capital. So, if you're looking for a credible platform to buy, sell, trade, or securely hold digital assets, iTrust Capital is my go-to platform, and I personally use them and I recommend you look into them.

[00:09:49]Now, they offer institutional-grade security, access to over 80 cryptocurrencies and utility digital assets, fully allocated physical gold and silver if you're interested in precious metals, and a simple 1% flat transaction fee with no monthly fees, which remains one of the lowest in the entire industry. And they're also about to roll out access to stocks and some of the top commodity names by this summer.

[00:10:19]And for those with a longerterm investment time horizon, they also offer IRA accounts and the ability to roll over allegible retirement accounts such as an old 401k that allows investors to take advantage of these potential tax benefits that are out there. As always, do your own research, understand your own financial situation, and choose a platform that best aligns with your investment goals and what you are trying to achieve. You'll find the link in the description below. Now, coming back to the topic of utility and bull runs, this is where I think the confusion really comes up around utility bull runs. This is where it begins. A utilitydriven bull run would be something very different. It would represent a much different phase in the evolution of this entire industry. So instead of price appreciation being driven primarily by investors just speculating or investing based on future price or future adoption, demand would increasingly come from actual usage of the digital assets and the networks themselves. So businesses, financial institutions, governments, payment providers, and other participants in the marketplace would not be acquiring digital assets simply because they believe the price is going to increase tomorrow. Instead, they would be acquiring them because they serve a very practical and specific purpose within an ecosystem. They would need these assets in order to facilitate transactions, tokenize value, access liquidity, settle value, interact with financial infrastructure, or simply just utilize specific network capabilities within that ecosystem so that they could stay ahead in the new financial system. So the key difference here is that a traditional bull market is largely driven by liquidity and capital flowing into an asset class because investors believe the prices will rise tomorrow and the future will be bigger than it is today. A utility bull run very different would be driven by the world actually using these technologies and networks at scale. And that distinction matters because when adoption becomes the primary driver of demand, what happens is the dynamics of the entire market begin to shift. And I think that's ultimately the big picture here that actually gets lost in this entire conversation. The market has already gone through several cycles of massive speculation, innovation, and capital formation. And we've watched this entire industry basically mature significantly from where it started. But we're still in the process of moving from an environment where people are primarily investing in the potential of this technology and where prices will be to an environment where the technology itself is actually creating measurable economic value not just in the economy but within the broader financial system globally. That's the transition that we're currently in. And that transition does not happen overnight. As I've explained many times, it takes time. It requires infrastructure, adoption, regulation, real world integration, and most importantly, time. Now, we've seen this same pattern play out with many transformative technologies throughout history. The early stages are often dominated by massive speculation and investment and that is something that eventually shifts as time goes by. The later stages are defined by what the technology actually becomes and the economic value that it ultimately creates for the entire system. And in my humble opinion, that is really the distinction between the bull markets we've experienced so far over multiple cycles and the utilitydriven bull market that will eventually come in hopefully the not too distant future. That's all I have for you guys today. Take care. Hope you learned something. Give me a thumbs up, like the video, and follow for more information and material like this.