From a macro perspective, the real crypto bull market has not yet begun

Author: rektdiomedes

Translation: Chopper, Foresight News

If you rationally examine the global macro market, you'll find that current market behavior is entirely logical and shows no abnormalities.

Gold's Surge: Outpacing Stocks and Crypto, Driven by Global Reserve De-Dollarization

Gold is experiencing a dramatic rally, outperforming not only equities but also leaving cryptocurrencies far behind. The core driver of this phenomenon is a shift in asset allocation by major sovereign nations: China, India, Russia, and even the United States itself, are all aggressively increasing their gold holdings. At its essence, this is a clear signal of a gradual exit from the era of dollar-denominated Treasury bonds as the dominant reserve asset.

This shift has been triggered by two pivotal events:

• The U.S.'s long-standing fiscal profligacy, which continuously erodes the credibility of the dollar;

• The U.S. decision several years ago to freeze Russia’s foreign exchange and Treasury bond reserves, which shattered the illusion that "U.S. Treasuries are neutral reserve assets," making countries acutely aware of the risks inherent in holding dollar-denominated assets.

Top macro analysts such as Doomberg and Luke Gromen have extensively discussed this trend. From a game theory perspective, after witnessing the U.S. arbitrarily freezing foreign assets, nations like Russia, China, and India have rationally responded by increasing gold reserves while reducing holdings of U.S. Treasuries—after all, no country wants its financial security dictated by another nation's policies.

Steady U.S. Stock Gains: Not a Bubble, But a Self-Sustaining Passive Investment Cycle

The U.S. stock market is rising, but not in an irrational frenzy—the gains remain relatively restrained.

The core reason is that the market has evolved into a self-reinforcing cycle driven by passive capital flows. This is a point Mike Green has emphasized for years. Today, virtually every salaried American worker automatically allocates retirement savings each month into mainstream index funds like the S&P 500, regardless of valuation levels or economic conditions. Over time, this constant inflow of mandatory capital naturally supports a gradual upward trajectory in equity prices.

Additionally, U.S. equities are increasingly becoming the central hub for global capital. As the global economy becomes more digital, the U.S. stock market—with its mature institutions, abundant liquidity, and robust exit mechanisms—has emerged as the premier venue for global capital formation. Anchored by global giants such as Amazon, Nvidia, Apple, and Microsoft, the dominance of U.S. equities is further reinforced. This structure is likely to persist until cryptocurrencies evolve into the "new global主场 for capital formation."

Frozen U.S. Housing Market: $37 Trillion in Equity, "Visible but Untouchable" Due to High Rates

The current U.S. residential real estate market is effectively frozen by high interest rates. Despite holding an estimated $37 trillion in home equity, this wealth is largely illiquid and cannot be easily accessed.

The reasons are straightforward:

• No one wants to refinance at rates higher than their current mortgage, as today’s mortgage rates are significantly above the lows seen in previous years—refinancing would increase costs;

• No one wants to sell their current home only to take on a new mortgage at much higher rates, making home upgrades prohibitively expensive and encouraging people to stay put;

• Certainly no one wants to borrow against home equity at double-digit interest rates—such high borrowing costs deter nearly everyone.

In short, the U.S. housing market under high rates has become a liquidity trap: vast equity exists in theory, but few can access it easily.

Cryptocurrencies: Recovering from 2022 Lows, But Bull Market Hasn't Started

In 2022, cryptocurrencies hit a cyclical low due to multiple shocks: Federal Reserve rate hikes, the collapse of Luna, and the FTX implosion. While prices have since rebounded, the market remains within normal range—neither surging irrationally nor plunging continuously.

In terms of scale, today’s crypto market is about 25% larger than its 2021 peak, yet still smaller than Nvidia’s market cap alone, and merely one-tenth the size of the gold market.

The reason we haven’t seen a bull run comparable to 2021 is the absence of massive macro liquidity injections.

Many attribute the 2021 bull market to pandemic stimulus and increased investment demand during lockdowns. However, I’ve always believed the true catalyst was the large-scale monetization of U.S. housing equity. During the last cycle, those “Cardano dads” watching Hosk’s YouTube videos and frantically clicking “Buy” on Coinbase funded their investments primarily through real estate—either selling homes, cash-out refinancing, or taking out home equity loans. It was this unlocked housing liquidity that fueled the 2021 crypto bull run.

Conclusion: The Crypto Bull Market Hasn't Begun—Likely to Start in Q2 2026

Taking all these macro factors together, the current performance across asset classes is completely logical and consistent.

Regarding cryptocurrencies, my view is: The real bull market hasn't started yet and is expected to begin in Q2 2026. By then, the Fed will likely have lowered interest rates sufficiently, allowing the U.S. housing market to gradually thaw, releasing pent-up liquidity into risk assets.

If this forecast holds, the subsequent six quarters (until around Q3 2027) could see a sustained and strong upward trend in crypto markets.

Toward the end of 2027 or early 2028, the bubble built up during the preceding euphoria may burst, compounded by policy uncertainty ahead of the U.S. election, potentially triggering a new wave of selling and ushering in a bear market cycle.

Therefore, I never believed the crypto bull market had ended—because it hasn't even truly begun. I will continue accumulating positions during downturns, deepening my involvement in the industry, while closely watching the market inflection point in Q2 2026.