There’s a growing conviction among many cryptocurrency enthusiasts that another bull run is right around the corner. The idea stems from historical patterns: bull markets tend to arrive at the end of the year, especially when interest rates are low and after a Bitcoin halving. Today, all three conditions are present. Many are convinced that the market will skyrocket, just as it did in the past.
But history doesn’t guarantee future success… unless everyone believes it? This is where the concept of a self-fulfilling prophecy comes into play.
The Self-Fulfilling Prophecy in Action
In economics, a self-fulfilling prophecy occurs when a widely held belief influences behavior in a way that causes the expected event to occur. People prepare for an outcome they believe is inevitable, and their collective actions make it a reality – even if it wasn’t likely in the first place.
When it comes to crypto, if enough people believe a bull run is imminent, they start buying coins in anticipation. The influx of investments increases demand, which pushes prices up. Soon, the expected bull run materializes. The prophecy fulfills itself because people’s actions changed the outcome.
Implications for Crypto Cycles
This dynamic is particularly relevant in the cryptocurrency world, where market cycles are often attributed to Bitcoin halving events. It’s widely accepted that prices surge after a halving, causing many to invest. And since more people are buying, prices do go up. The same applies to market downturns between halvings. If people expect lower prices and hold off on investing, the lack of demand slows growth. Again, the belief creates the reality.
It’s likely that one of the reasons cryptocurrencies follow cyclical patterns is because of this self-fulfilling nature. The widespread belief in these cycles shapes investor behavior, which then makes the cycles a reality.
This phenomenon isn’t unique to crypto. It plays a critical role in broader economic events. For instance, if people believe a recession is imminent, they’ll start saving more and spending less. Lower consumer spending results in reduced revenue for businesses, leading to layoffs, lower GDP growth, and, eventually, the very recession people feared. Governments and central banks are aware of this, which is why they carefully communicate their intentions. The wrong message could fuel negative beliefs that become self-fulfilling and derail their plans.
As we approach the final quarter of the year, it’s worth asking whether the excitement in the cryptocurrency market is driven by solid fundamentals – or by the belief that another bull run is simply inevitable. If prices surge in the coming weeks, it could be a case of the market fulfilling the very prophecy so many believe in.
