The crypto market operates in cyclical patterns, largely influenced by the Bitcoin halving event, which occurs every four years. This cyclical nature has created a narrative of consistent growth every four years, attracting a new wave of investors with each cycle. This narrative has become so ingrained that many dismiss the numerous charts and analyses that challenge it.
However, the narrative of the bull market hinges on two key factors: institutional adoption and mass adoption.
The Institutional Adoption Narrative: A Fading Story?
The arrival of institutions into the crypto space has been a long-awaited catalyst for market growth. The approval of Bitcoin and Ethereum ETFs by major financial institutions worldwide seemed to solidify this narrative. Indeed, some financial giants, like Goldman Sachs, have begun investing in Bitcoin, with Goldman Sachs purchasing $418 million worth of BTC in August 2024.
While institutional participation is growing, the pace of adoption is slower than many anticipated. The initial frenzy seems to be subsiding, with other institutions cautiously entering the market. This suggests the initial institutional narrative may be reaching its peak, though it remains a significant driver for future growth.
Mass Adoption: A Complex Metric with Uncertain Trajectory
The concept of mass adoption is more challenging to quantify. The general consensus is that when a billion people are actively using cryptocurrency, we will have reached mass adoption.
While several projects are using this narrative to fuel their early-stage development, we are still far from reaching that milestone. In June 2024, Binance announced reaching over 200 million users. Chainalysis estimated the global crypto user base at 400 million, while Statista reported an even higher number, 617 million. While the true figure likely falls somewhere in between, it indicates that we are still a significant distance from a billion users.
The Bearish Perspective: A Potential Shift in the Narrative
The narrative surrounding the bull market has begun to shift, with many analysts predicting its end. The apparent completion of the institutional and mass adoption narratives has fueled the bearish sentiment.
This bearish outlook suggests that the current bull market may be nearing its peak, with a potential for a minor rebound and a few "2x" gains at best.
Developer Activity: A More Robust Indicator of Long-Term Growth
However, a closer examination of the developer activity reveals a different story, one that contradicts the narrative of a waning bull market.
Electric Capital, a renowned Tier-1 venture fund, has developed a website (developerreport.com) that tracks the activity of crypto developers based on GitHub data.
This data reveals a concerning trend: the number of crypto developers has not only failed to increase during the first half of 2024, but has actually declined by approximately 4%.
While this might seem counterintuitive during a bullish period, it suggests that the recent growth did not attract the attention of developers, indicating a potential lack of long-term momentum.
Furthermore, comparing this to previous bull markets highlights a stark difference: In 2017 and 2021, the number of new developers increased by 4 to 7 times. The modest 10% growth in the first half of 2024 points to a lackluster bull market.
The "Long Tail" of Developer Growth: A Critical Catalyst for Mass Adoption
This lack of developer interest is not merely a short-term anomaly. According to Statista, there are 28.7 million developers worldwide. The current number of crypto developers represents a mere 0.09% of this global pool.
This meager figure reveals a fundamental truth: the current crypto landscape is not attracting enough developers to deliver user-friendly applications. Until we see a significant influx of developers, the mass adoption of crypto remains a distant dream.
A larger pool of developers will be crucial for building the intuitive tools and applications that will bridge the gap between technology and mainstream user adoption. Until the number of crypto developers reaches at least 10% of the global developer population, the bull market narrative will continue to evolve.
The Future of the Bull Market: A Shift in Focus
While the current bull market may be nearing its peak, the long-term potential for growth remains intact. The massive influx of developers needed to drive mainstream adoption is still a significant distance away, and this represents a long-term opportunity for the crypto market.
However, it is important to note that the future bull market may take a different form. Rather than solely focusing on the core infrastructure like Bitcoin, Ethereum, and Solana, the growth may be driven by the emergence of altcoins and new use cases facilitated by the growing pool of developers.
The crypto market is a complex and evolving landscape. While the narratives of institutional and mass adoption have driven recent growth, a deeper examination of developer activity reveals a different perspective. The lack of developer interest suggests that the current bull market may be nearing its peak. However, the long-term potential for growth remains significant, as the crypto market is still in its early stages. The future bull market may focus on new use cases and altcoins, driven by a larger pool of developers who will bridge the gap between technology and mainstream adoption.