Coinbase CEO Brian Armstrong believes the crypto market may be approaching its next bull phase, pointing to historical market cycles and improving macroeconomic conditions.
Bitcoin has recently climbed above $78,000, while broader market sentiment has improved following a sharp rebound in crypto prices.
Trading Volumes Slumped Before the Rebound
Armstrong’s outlook comes after several months of declining trading activity and weak sentiment.
Spot trading volume across 14 major cryptocurrency exchanges fell 21.7% in July to $429 billion, down from $547.9 billion in June. All 14 exchanges recorded monthly declines, with Binance accounting for the largest share at approximately $196.5 billion.
Coinbase also experienced a significant decline in spot volume, while Bitfinex recorded an even sharper contraction.
Derivatives activity weakened as well, with monthly volume falling 11.1% to roughly $3.03 trillion. At the same time, the futures-to-spot ratio increased, indicating that traders were relying more heavily on leveraged positions.
Investor sentiment remained subdued into mid-August, with the Crypto Fear and Greed Index reaching as low as 29 on Aug. 13.
Treasury Policy Helps Shift Market Sentiment
Market conditions changed significantly on Aug. 19 after the US Treasury announced an expansion of its longer-term bond buyback program.
The Treasury increased the maximum size of certain operations to at least $4 billion, up from $2 billion, while also increasing the frequency of the operations.
The announcement pushed Treasury yields lower. The 10-year yield fell to around 4.65%, while the 30-year yield declined to approximately 5.20%.
Lower yields and improving liquidity conditions helped strengthen demand for risk assets, including cryptocurrencies. Bitcoin has subsequently climbed roughly 22% from its recent levels, trading near $78,700.
The broader shift has also coincided with renewed discussion around potential government involvement in Bitcoin, adding another layer to the bullish narrative.
Armstrong Points to Historical Crypto Cycles
Armstrong’s central argument is based on the length of previous crypto bear markets.
He suggested that spot-market downturns have historically lasted roughly 370 to 380 days, and believes the current cycle is approaching a similar duration.
That timing, combined with improving liquidity and rising Bitcoin prices, has led him to argue that the market could be nearing the beginning of another sustained expansion.
Two potential catalysts could further influence the market: the expected September Senate vote on the CLARITY Act and the historically stronger performance of Bitcoin during the final months of certain halving cycles.
Armstrong therefore sees a reasonable possibility that the next bull market is already approaching.
Analysts Remain Divided
Not everyone shares the same level of confidence.
While Armstrong sees the current conditions as consistent with a potential market-cycle transition, some analysts continue to expect another correction before a sustained advance begins.
Benjamin Cowen, for example, has suggested that Bitcoin could still experience another significant decline if previous mid-cycle patterns repeat.
For now, Bitcoin’s move above $78,000, improving liquidity conditions and recovering investor sentiment provide support for Armstrong’s bullish outlook. But whether the recent rally develops into a full-scale bull market will depend on sustained spot demand, macroeconomic liquidity and the market’s ability to avoid another leverage-driven reversal.
