With the cryptocurrency market hovering near a record high in January 2025, observers have speculated that the industry could be in the midst of a supercycle. A supercycle is a long period of economic growth and expansion characterized by strong demand for goods and services—in this case, Bitcoin.

News that governments and corporations are planning to stockpile Bitcoin has fueled speculation of a supercycle, which would further drive up the price of the number-one cryptocurrency. Currently, Bitcoin's price is well over $100,000, after it hit an all-time high above $108,000 in December 2024.

A supercycle could reshape the economy in countries like El Salvador, where Bitcoin is legal tender.

In the U.S., incoming President Donald Trump has teased the idea of establishing a strategic Bitcoin reserve, inspiring states like Ohio, Texas and Oklahoma, as well as nations such as Brazil, Japan, and Russia, to follow suit. In stricter regions like China, however, the impact of a supercycle may be limited.

What is a supercycle?

A financial supercycle is a long-term trend in financial markets that spans decades and is shaped by major economic, political, and technological changes. These cycles capture the big-picture trajectory of economies and markets and affect asset prices, interest rates, and overall economic growth.

“Today, I think we may be entering a new supercycle defined by digital assets,” Mike Marshall, Senior Researcher at blockchain analytics firm Amberdata, told Decrypt. Marshall explained that, “With more institutional involvement, confidence in products like ETFs, clearer regulations, and increasing demand for alternative investments, crypto is becoming a key part of the next major phase.”

Historical examples of supercycles include the post-Civil War era, which saw rapid industrial growth and innovation between the years 1865 and 1914. Following World War II, Europe and Japan rebuilt their economies, revitalizing global trade, while in the 2000s, China’s industrial boom reshaped markets until the 2008 financial crisis—which served as a catalyst for the creation of Bitcoin by the pseudonymous Satoshi Nakamoto.

“Crypto, while still emerging, is starting to follow these patterns as they’re affected by long-term shifts in regulation, politics, market sentiment, and technological progress,” Marshall said. “As crypto infrastructure becomes more reliable and large financial institutions get involved, these big-picture economic trends play an even larger role in influencing digital asset prices.”

Although volatility is a defining feature of the cryptocurrency market, Alice Liu, head researcher at crypto price tracking site CoinMarketCap, noted that Bitcoin’s cyclical nature combined with macroeconomic trends creates a strong case for its continued growth and adoption.

“If we consider the crypto industry's growth within the framework of financial supercycles, it becomes clear that cryptocurrencies are not merely a byproduct of market trends but a significant contributor to the evolution of global finance,” Liu told Decrypt. “The convergence of traditional and digital financial systems, coupled with the long-term implications of technological advancements, suggests that the 2020s could mark a transformative era for both markets.”

Highlighting market volatility, Liu cautioned investors against jumping blindly into the cryptocurrency market.

2025: a pivotal year?

Liu believes that the convergence of macroeconomic trends and crypto-specific cycles makes 2025 a pivotal year. Clearer regulations are expected to drive greater institutional participation. At the same time, innovations like layer-2 solutions and DeFi, coupled with rising interest in decentralized finance amid geopolitical and economic uncertainties, could further accelerate the sector's growth.

“As 2025 approaches, investors and market participants should prepare for a dynamic period characterized by both significant opportunities and inherent risks,” Liu said.

Not everyone is convinced that the cryptocurrency market is entering a supercycle. Some argue that despite the recent surge in prices and growing institutional interest, the market’s volatility makes sustained growth unlikely. 

“Bookmark it for later: a supercycle is never real - everything is cyclical, though cycles can vary in length,” Chris Burniske, partner at venture capital firm Placeholder,  tweeted. In a follow-up tweet, he added, “Buying into the idea of a supercycle is how you never sell and roundtrip. Ask anyone who never sold in 2021.”