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‘Evidence is Piling Up’ For New Crypto Bull Market as Key US Economy Gauge Nears End of Two-Year Downtrend, Delphi Digital Says

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Kevin Kelly on new crypto cycle
Kevin Kelly on new crypto cycle

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Evidence is piling up that a new crypto bull market is about to begin as a key US economic gauge nears the final stages of its two-year downtrend.

That’s the view of Kevin Kelly, co-founder of research firm Delphi Digital, who argued in a series of tweets that cryptocurrencies and risk markets broadly track the ISM Manufacturing Index, a key indicator of the state of the US economy.

“It looks like the ISM is nearing the final stages of its two-year downtrend,” he said. “BTC’s YoY% change usually shows signs of a reversal near bottoms in the ISM YoY. And so far, that’s exactly what we’ve seen this time around.” 

Kelly said it’s remarkable how closely the ISM has tracked the trajectory of previous market cycles, including the timing of peaks and troughs,

“This is the real kicker IMO,” he said. “Every 3.5 years it’s rinse and repeat, like clockwork.”

Such turning points in the business cycle have historically been ripe opportunities to increase risk exposure, he said. 

 

ISM Business Cycle
Source: Delphi digital

“We’re more likely in an environment akin to one like 2015-2017,” he said. “The more I stare at the charts, the more I believe this scenario is the highest probability one given where we are at the moment.”

For the Delphi Digital co-founder, the “catalysts are stacking up” and if market participants look beyond the short-term things will be “significantly brighter in the next “12-18 months.”

Positive Fundamentals May Trigger a New Crypto Bull Run

Bitcoin (BTC) price has been oscillating around the $30,000 mark since April with the $32,000 hurdle proving difficult to overcome. However, some analysts believe that positive developments in the crypto space such as spot Bitcoin ETF applications, the likely imminent end of interest rate hikes, and increased institutional adoption and entry into the Web3 ecosystem could help trigger a sustained recovery.

For example, PayPal, the online payments giant, launched its US dollar-backed stablecoin PayPal USD (PYUSD) last week. PayPal users can now buy PayPal USD, transfer it to compatible external crypto wallets, make peer-to-peer payments, pay for purchases, and use it to convert any of PayPal’s supported cryptocurrencies.

PayPal is a significant player in the financial industry and according to an X user Player 456, PYUSD was a big move that could trigger a crypto bull run. 

According to Player 456, the 2021 crypto bull market came after PayPal launched a service to enable people to buy, send and hold crypto in 2020. He believes with this latest move, the market may recover in the coming year.

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