Crypto market rally explained: why is the bull run happening?

A crypto market rally is happening, with Bitcoin price hovering at its all-time high and the valuation of all coins soaring to $4.36 trillion. This article highlights some of the top reasons why the crypto bull run is happening.

Crypto market rally triggered by rising institutional demand

One of the top reasons why the crypto market rally is happening is the ongoing institutional demand in the United States. A good example of this is the strong crypto ETF inflows.

Spot Bitcoin (BTC) ETFs had a net inflow of over $3.25 billion last week. This pushed cumulative inflows since their inception to over $60 billion. The surge has lifted the iShares Bitcoin Trust to more than $96 billion.

Spot Ethereum (ETH) inflows rose by $1.30 billion last week, with the cumulative figure nearing the $15 billion mark. Other ETFs tracking popular coins like Dogecoin, Solana, and XRP have also recorded substantial inflows.

Institutions have also spent billions of dollars accumulating key coins. For example, there are now hundreds of companies holding over 1.07 million coins in aggregate.

Companies such as BitMine, SharpLink, and The Ether Machine have accumulated more than 3.6 million coins. BitMine holds Ethereum worth over $7.9 billion, while SharpLink has tokens valued at $3.65 billion. Companies have also bought tokens like Solana, BNB, and Avalanche.

Federal Reserve interest rate cuts.

The other main reason why the crypto market rally is happening is that the Federal Reserve has started cutting interest rates. It reduced rates by 0.25% last month, and all signs point to additional cuts later this year.

A report released by ADP on Wednesday showed that the economy lost 36,000 jobs in September after losing another 3,000 in the previous month. Another report by ISM showed that the services PMI fell in September.

On top of this, the prospect of a government shutdown will affect economic growth, which could push the bank to cut interest rates to support the economy. The crypto market tends to do well when the Fed is cutting interest rates. This also helps explain why the gold price is in a strong bull run this year.

October and Q4 are good periods for the cryptocurrency market 

The crypto bull run is also happening because of seasonality. Historically, October and the fourth quarter are the best periods for the industry.

A good example of this is Bitcoin’s performance. The coin has jumped in 8 fourth quarters since 2013, with the average return being 79%. It only dropped in October 2014 and 2018, with the average return being 21%.

This October has the catalysts of Federal Reserve interest-rate cuts and the potential approvals of additional altcoin ETFs.