Crypto Resurgence: When Will the Bull Run Return? Experts Weigh In
The crypto market is currently grappling with a critical question: is the overarching cycle still intact, and when can investors anticipate the next significant bull run? Leading macro commentators point to a clear chain of events, tying the current market downturn to liquidity issues and broader economic policy, rather than solely sentiment. The resolution, they argue, hinges on specific shifts in U.S. financial mechanisms and governmental actions.
Liquidity Crisis and Policy Pivots
Analysts highlight a significant contraction in liquidity, which has impacted risk markets, starting with Bitcoin and now affecting broader indices. This market stress is largely attributed to a depletion of bank reserves, as substantial cash flows into the U.S. Treasury General Account (TGA) and the Federal Reserve's Quantitative Tightening (QT) policy continues to shrink its balance sheet. The TGA, currently overfilled beyond its $850 billion cap due to factors like higher issuance and payment timings, acts as a "suction pump" on aggregate reserves. Experts predict that while these pressures will eventually force actions to stabilize market plumbing, it will take time. The path to a crypto market bottom appears intrinsically linked to upcoming policy milestones. A resolution to the ongoing situation in Washington is seen as a crucial catalyst, shifting the TGA from hoarding cash to actively spending it. This would, in turn, ease reserve scarcity as QT is unwound (expected around December 1st) and potentially followed by further Fed actions by December 10th. Coupled with an anticipated expansion of the fiscal deficit from January 1st, 2026, these developments are expected to reinvigorate liquidity flow, weakening the dollar and boosting high-beta assets like cryptocurrency.
The Global Liquidity Cycle and Future Outlook
Raoul Pal, a prominent voice centered on global liquidity cycles, reinforces this perspective, emphasizing that the "only game in town" for the next 12 months is the rolling of $10 trillion in debt. He posits that once fiscal operations restart post-resolution, the Treasury will inject $250-350 billion into the economy, effectively ending QT and expanding the balance sheet. This return of liquidity is forecasted to weaken the dollar and provide a tailwind for risk assets. Beyond monetary policy, prospective regulatory catalysts such as changes to SLR (Supplemental Leverage Ratio) rules and the passage of the CLARITY Act are expected to provide much-needed regulatory clarity, facilitating large-scale institutional adoption of crypto. With global support from China's balance-sheet expansion and Japan's supportive policy mix, a broader risk rally is anticipated. Investors are advised to weather current volatility without overreacting, viewing drawdowns as normal in a bull market. The consensus points to a sequence of events—Washington resolution, easing reserve scarcity, a weaker dollar, and renewed fiscal impulse—that will ultimately re-steepen growth into 2026, pushing the total crypto market cap, currently at $3.38 trillion, significantly higher.
