Key Points:

Institutional capital inflow is increasing, but retail interest and app store rankings remain unusually low.

A weaker dollar or the adoption of major ETFs could push the crypto market's market cap above its previous highs.

Traders are always anxiously waiting for the start of a crypto supercycle, a phenomenon that deviates from the traditional four-year cycle, which typically sees gains after each Bitcoin (BTC) halving.

Since 2021, some analysts have proposed a new paradigm suggesting that the crypto market could exceed its previous peak by 400%. For example, X user CryptoKaleo recently posted about the "true" supercycle.

Even if the assumptions shared by CryptoKaleo prove accurate, it is still too early to conclude that the market has entered a crypto supercycle. The current total market cap is $3.4 trillion, only 29% higher than the $2.65 trillion recorded in November 2021.

So far, this prediction has not materialized, but there are some factors that could confirm the start of a supercycle.

One catalyst is the dollar index (DXY) falling below 95, a level last seen in November 2021. A continued weakening of the dollar against other major fiat currencies would indicate increasing investor unease about the U.S. fiscal situation. In this scenario, a portion of the $24.7 trillion in U.S. Treasury bonds held by the public may flow into alternative assets, including cryptocurrencies.

Another major potential driver is the rapid expansion of the exchange-traded fund (ETF) industry. Despite recent strong momentum, the currently managed crypto-related assets amount to only $190 billion, which is still negligible compared to traditional asset classes. In contrast, the three major S&P 500 ETFs alone control a total of $2 trillion in assets.

Despite initial enthusiasm, the U.S. government's strategic Bitcoin reserve plan remains unclear. If the Trump administration were to accumulate at least 200,000 BTC, it could significantly change market sentiment. A similar effect could come from corporate financial allocations by tech giants like Google, Apple, or Microsoft.

Retail investor participation also plays a crucial role in triggering a supercycle. Search volumes for terms like "buy Bitcoin" and "buy cryptocurrency" have remained steady over the past five months, far below the highs of November 2024. Similarly, the rankings of the Coinbase and Robinhood apps have declined in U.S. app stores over the past three months.

While institutional capital dominates this cycle, FOMO driven by retail remains the fuel for parabolic growth. Another key signal would be the revival of narratives in the altcoin sector—whether driven by AI tokens, casino coins, or traditional cat and dog-themed meme tokens.

Currently, according to CoinMarketCap, the market cap of meme coins is $68.5 billion, down from the historical high of $140.5 billion set in December 2024.

These scenarios remain speculative and depend on unpredictable macroeconomic and geopolitical developments, including the U.S. Federal Reserve's ability to avoid recession and the evolution of global trade relations.

However, the closer the market gets to meeting these conditions, the greater the likelihood of exceeding a market cap of $13.2 trillion, which would mean a 400% increase from the peak in November 2021.

Related: The U.S. Democratic Party strikes back at digital asset legislation with "Anti-Crypto Corruption Week"

Original: “Is the Crypto Market Entering a New Supercycle? Here Are 5 Ways to Know”

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