At the beginning of 2022, especially after the peak of the bull market at the end of 2021, many people in the cryptocurrency space (including institutional investors, analysts, and KOLs) believed that this cycle would not enter a traditional bear market, but rather a "supercycle," where prices would continue to rise or at least not experience an 80%-90% crash. Their core logic was "this time is different." Below are the most mainstream arguments at that time (these views were widely circulated on platforms like Twitter, Reddit, CoinDesk, and Moneyweb in early 2021-2022):
- Institutional adoption exploded, with demand never drying up. In 2021, companies like MicroStrategy, Tesla, and Square amassed large amounts of Bitcoin, and institutional funds continuously flowed in through Grayscale and futures ETFs.
People believed that institutions were "smart money" and would not panic sell like retail investors, but would hold long-term. This would provide permanent buying support, preventing the formation of a bear market.
Typical statement: Ryan Allis (partner at HeartRithm) stated in January 2022, "We may be in a Bitcoin supercycle, not a bear market cycle."
- Bitcoin's dominance declined, with other chains/ecosystems flourishing. During the 2017 bull market, BTC accounted for 70% of the entire market, which dropped to 40% in 2021. L1 chains like Ethereum, Solana, and Avalanche rose, while DeFi, NFTs, GameFi, and the metaverse allowed funds to rotate between different narratives.
Logic: Money would not leave the market entirely but would flow from one hotspot to another, allowing the entire crypto market to "internally cycle," avoiding systemic collapse.
- DeFi high yields replaced traditional wealth management. DeFi offered annualized returns of 12%-18%, far exceeding bank rates of 0%-3%. People believed that in a low-interest-rate environment, global funds would continue to flow into crypto to earn "real returns."
Typical view: In January 2022, Revix analyst Brett Hope Robertson publicly supported the supercycle theory, stating, "DeFi opens new opportunities for yield hunters."
- The macro environment was super friendly: inflation + unlimited money printing. In 2021, U.S. inflation reached 7% (a 40-year high), while Bitcoin's inflation rate was only 1.4%, seen as "digital gold + anti-inflation asset."
The Federal Reserve engaged in unlimited QE from 2020 to 2021, leading to a global liquidity flood. People believed that "there's so much money with nowhere to go, it can only flow into Bitcoin."
- Evidence of historical cycles being broken. Previous patterns: after halving, the second year (2013, 2017) saw a significant rise, while the third year (2014, 2018) experienced a bear market.
After rising to $69,000 in 2021, Bitcoin only corrected by 30%-40%, leading many to believe that "it has broken away from the 4-year cycle and entered a perpetual bull market." Influencers like Dan Held and Willy Woo repeatedly promoted the "supercycle" in 2021.
Reality: The supercycle theory collectively collapsed in May 2022 with the Terra/Luna crash → Three Arrows Capital liquidation → Celsius and BlockFi pausing withdrawals → FTX's collapse, a series of domino effects that caused the market to evaporate by $2 trillion.
Bitcoin fell from $69,000 to $15,000 (-78%), and Ethereum dropped from $4,800 to $880 (-82%), fully entering the crypto winter of 2022.
Even Su Zhu, the founder of Three Arrows Capital, who was among the first to call for a supercycle, tweeted in May 2022, admitting, "My supercycle price theory was regrettably wrong."
Lesson: Every time the bull market peaks, someone shouts "this time is different," but the cycle of greed → leverage → black swan → panic selling has never been broken. The "supercycle dream" of 2022 ultimately turned into the most severe bear market, making countless people deeply realize: cycles always exist, but their length and depth may change due to new variables.
Summary from Grok.
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