If you look at the past values, crypto investments should increase significantly again shortly before and almost two years after the halving or for those who are more macro-oriented: after monetary policy has been relaxed.
But is the current situation really comparable to the last cycles? I have great doubts about this, because the global situation differs enormously. Instead of minimal, insignificant acts of war in the farthest corners of the world, the Western world, that is, the one that provides the predominant economic power, is now involved in two armed conflicts within its own ranks: Ukraine and Israel. I am not concerned here with the political dimension of these armed conflicts, otherwise as a pacifist I would have to give up my attempt at a neutral perspective - I am concerned with the economic component of these wars.
Because let's not kid ourselves, it's not just Ukraine fighting against Russia in Ukraine, nor is it just the State of Israel fighting against Hamas and Hezbollah in Israel. In Ukraine the West is fighting against Russia and in Israel the West is fighting against the religious-fanatical Islamic groups and Islamic states. Both are not regional wars but proxy wars that have to be subsidized by the West with huge sums of money, because otherwise both the Ukraine war and the invasion of Israel would have ended long ago at the expense of the Western-oriented countries.
So two wars cost billions of taxpayers' money that is not even available, since most Western countries are currently more or less controlled by left-wing politicians who care more about climate issues, gender issues and social subsidies than elementary state tasks such as infrastructure maintenance, public order and defense. This not only leads to the population distancing themselves more and more from their politicians, but also to the fact that critical opinions have now become so dangerous for those in power that freedom of expression and freedom of the press are being suppressed worldwide. But I digress...
What is certain, however, is that the costs of war support cannot be financed from the budget, but only through additional debt. This in turn means that government demand remains high despite central banks raising interest rates, which should slow down demand. In fact, the situation is getting further out of hand, because interest rates are rising and a reduction in interest rates is not an option any time soon, as the sectors of the economy driven by government demand are booming (arms, electric cars, solar) and are compensating for the shrinking areas, so that the the hoped-for effect (limiting inflation) does not materialize. The problem is that most people are hugely affected by the increased prices. As an example, I'll look at the largest economy, namely the United States, where private credit card debt has reached new highs. No wonder, since credit card interest rates range between 15 and 29 percent. You have to know that in the USA a lot of financing is done through credit card loans and not through bank loans.
Or let’s take a look at car financing. Depending on your creditworthiness (in the USA there is a credit score for each person, which has a direct influence on the interest rate), the interest rates range between 5 and 14 percent for new cars and between 7 and 21 percent for used cars. These interest rates have multiplied in just 18 months. In America, however, many people are dependent on a car because they often have to travel 200 kilometers a day to get to work. In contrast to Germany, public transport is not an alternative if you live outside of big cities. The annuities (i.e. the sum of repayment and interest) easily reach 2.5% of the loan amount per month. Since mortgages have also risen to 8 percent, many Americans are no longer able to pay off their debts or at least not reduce them. Meanwhile, over 6% of borrowers are no longer able to meet their monthly payments because the credit limits of their credit cards have been exhausted! This is the highest level in 30 years!
The national debt is exploding in the same way because war spending and the enormous interest payments lead to an exponential increase in payment obligations, which in turn can only be paid off with new debts, which of course mean high additional interest charges.
The problem is that national debt is not taken on by just one party, but rather all citizens ultimately have to pay off their country's debts. This can only happen in two ways: either through tax increases or through currency devaluation, i.e. inflation. In many countries in the Western world, taxes are already so high that it is almost impossible to implement significant increases - this means that the countries need inflation to reduce the value of their debts again and to improve the ratio through increased income and thus higher taxes . To illustrate with an example: If the government has a trillion in debt and tax revenue is 100 billion at a tax rate of 50%, inflation of 10 percent brings tax revenue to 110 billion, so the ratio from 1:10 has shifted 1:9 and an additional 10 billion is available for repayment (or more realistically for our politicians: for interest).
But if inflation remains high for a longer period of time and many households are barely able to pay off their debts, where will the money for new investments come from. Yes, the wealthy can shift out of cash into other assets, but whether this will happen to the extent hoped for given high inflation and high “risk-free” interest rates on bonds is questionable.
Perhaps we first need several changes of government around the world to return to sounder financial policies and a more business-friendly environment.
In addition, the tendency towards state control and regulation of companies observed in China is dangerous for global growth, as it will result in lower growth rates (and thus purchases in the Western world), which should also limit the growth of trading partners in the Western world.
Only when states have problems servicing their government bonds on time because new debts are no longer accepted on the market without reservations or only at even higher risk premiums does the pressure on the central banks increase to such an extent that monetary policy is relaxed again despite high inflation must become. The longer the central banks wait, the harder the money press has to work.
As a result, this means that we might not see a bull market until later, but it might then be stronger because we only turned the lever shortly before the collapse of the money/currency system...