Bull Run Cancelled in Crypto? Nope.
(It’s a Macro Thing.)
By Jake Ryan | CIO, Tradecraft Capital
By James Diorio | CEO, Tradecraft Capital
April 2, 2025
Many people have been shouting from the top of the mountain that this bull run is over, that we’ve reached market tops, and that the crypto cycle has ended. We don’t agree. In fact, we don’t believe the bull run has been cancelled by any stretch.
When having conversations with your clients, remind them that every bull market has pullbacks – in fact we general see 5 or so pullbacks that could range up to 50%, but average 30%. We’re experiencing one now, and it’s important to tell your clients that’s OK. These markets are tied to global liquidity and as soon as we get over the short term speedbumps – largely from the back and forth tariffs – we fully expect to be back to our regularly scheduled run. In fact, this run will be one that we expect to be not just bitcoin strong, but overall strong for other quality “alternative” crypto assets. This is a very consistent pattern, one that we saw clearly in 2021 and one that we expect again.
There’s a very interesting statistic that we’ve been following. You see, given that crypto is a worldwide phenomenon largely drive by global liquidity we have specific data points, and an interesting one is that any time we have capital fleeing China – of which $82 billion did in January – we see a huge jump in the price of bitcoin.
We saw this in October 2023 and July 2024 which also led to a subsequent doubling in the price of bitcoin. Given this pattern it looks like we expect it again now in 2025. If you’re inclined there’s a very good ZeroHedge article which, in summary notes:
…don’t be surprised if in the next 6 months Bitcoin doubles again – for the third time in the past year – and the move has little to do with ETF inflows, the halving, a pro-crypto Trump administration, or frankly anything else taking place in the US, and instead is entirely driven by China’s massive wall of money which at last check was almost 3x bigger than the US…
If this holds true it means that we would expect a doubling event to happen for bitcoin (initially) in 2025, then due to the stage of our markets we would expect moves into quality altcoins as this final year of the bull run is traditionally alt-season.
As you can see in the chart below, the PBoC is about to have its version of Quantitative Easing (QE) throughout 2025 and 2026. This is going to push global M2 in a continued expansion cycle along with other global central banks cutting rates and potentially doing their own forms of QE or financial/banking QE like the US Treasury has been doing in coordination with the Fed.
Of course, other economic factors need to be considered… and it seems they are falling in line as well. The US Dollar, as measured by the DXY Index, has now fallen to levels that support such a move. It peaked at 109.5 in January but it’s now below 106, which is a key level for us (see chart below).
Chart of the DXY Index in TradingView, 1 year, with peaking at 109.5 and changing trend in January of 2025.
In fact, it’s now below 104 as of this writing, and that’s just what the global economy and the markets need. The direction, along with the rate of change, is going to goose the global economy because developed and developing countries alike can buy more commodities when they get more USD’s from exchanging their currency. And since most commodities are purchased with USD’s, this allows them to buy more commodities, pay off more debt and put more capital to work in the economy.
It’s also worth noting the 10-year treasury has been on a steady decline while, at the same time, we see the ISM metrics – which is the manufacturing index – growing. These factors along with a weaker dollar point to economic expansion and provide tailwinds for the next leg of the bull run to begin.
The primary risks are the potential damage of a prolonged tariff war and whether DOGE is cutting so many jobs so quickly that it affects US GDP. We need to see the effects of global monetary expansion on the global economy, and they need to have more power than the tariff tactics.
Our base case is that Trump is using tariffs more as a tactic and that they should be resolved, at least in part, by April. We also think the wall of money is going to be a stronger force than tariffs (as long as they aren’t prolonged.) If they are prolonged, it will push out the benefit of monetary expansion to H2 of 2025.
So, fret not. From our purview, the best of this cycle is still yet to come. We may need to wait until the tariff tactics provide more clarity. After that, we should be “game on” with the next leg in this bull market.
Jake Ryan is Author of Crypto Decrypted and Founder/CIO, Tradecraft Capital
James Diorio is Author of Crypto Decrypted and CEO, Tradecraft Capital
The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the position of DACFP or its affiliates. This content is provided for educational and informational purposes only and does not constitute investment, financial, legal, tax, or accounting advice, nor an offer, solicitation, or recommendation to buy or sell any security or other asset. Information is current as of the date of publication and may become outdated; no representation is made as to its accuracy or completeness. Publication does not constitute an endorsement of the author, the author’s firm, or any product or service referenced, and the author may hold positions in the assets discussed. Readers should consult their own qualified professionals before making any financial decisions.