How Asia Drives the Next Crypto Bull Market

We have arrived at the start of the next bull market. If history is our guide, these cycles are powered by multiple factors including Bitcoin's halving events, shifts in macroeconomic landscapes around U.S. elections and Federal Reserve interest rates, as well as the advent of new Web3 and DeFi innovations. Yield farming, for instance, was a significant innovation that fueled the previous cycle. The upcoming cycle may potentially feature a mix of zero-knowledge proofs, novel DeFi primitives like restaking, and innovative blockchain stacks that offer modularity, composability, and are primed for interchain asset and data movement.

This post is part of CoinDesk's "Crypto 2024" predictions package.

Each cycle is accompanied by a unique cultural narrative. The last cycle was dominated by art NFTs, sparked by Beeple's $69 million sale at Christie’s, and further fueled by the PFP craze and the fine arts use case growing with proponents at the scale of Sotheby’s and Pace Gallery. The present cycle, predictions suggest, will be molded by the SocialFi narrative, as platforms like Friend.Tech have already set the stage.

Institutional and regulatory narratives, too, play a crucial role. The last cycle saw MicroStrategy's Michael Saylor introducing Bitcoin to the corporate balance sheet, while this cycle is marked by traditional financial institutions and fintech giants applying for crypto ETFs and launching stablecoins.

On the regulatory front, the U.S. is still wrestling with crypto regulations, causing many projects to market their new crypto products outside the U.S. This is why I argue that the next bull market will have a distinct geographical flavor, with Asia taking center stage.

The enthusiasm for crypto in Asia is hard to miss. A stark contrast was visible between less vibrant fall conferences in the States and the buzzing scenes at Korea Blockchain Week and Token2049 in Singapore. Cities like Bangkok, Ho Chi Minh City, Jakarta, Manila, and Kuala Lumpur, not to mention a handful of large Indian cities, are home to substantial developer communities and flourishing Web3 scenes, bolstered by government support and enterprise adoption. The thriving environment at Token2049, in Singapore, the real capital being deployed by APAC investors into crypto projects, and the increasing appetite for NFTs collectively suggest a region primed to drive the next bull market.

While Asian governments vie for the top spot as a crypto hub, the U.S. seems to discourage its crypto entrepreneurs. As a result, marketing campaigns are excluding the U.S., businesses are expanding in Asia, Europe, and the Middle East to cater to growing demand, and entrepreneurs are relocating to jurisdictions with a friendlier regulatory environment.

Opening Serotonin offices in APAC, I've witnessed firsthand the unique advantages these markets offer to growing crypto projects. From tech-savvy, mobile-first audiences to high-quality developers eager to contribute to decentralized projects, the region is brimming with potential. There's a palpable enthusiasm for Web3 culture and a readiness to adopt new technologies, particularly SocialFi, which is already the norm in the region, thanks to exposure to WeChat. (SocialFi refers to applications allowing users to monetize social interactions and control their own data.)

Telegram, ubiquitously used for messaging by the Web3 community in Asia, is already testing out its self-custody crypto wallet in-app with non-U.S. users. Combining this with the regulatory friendliness of places like Hong Kong and Singapore, we are looking at a potentially explosive crypto boom. To us Americans, it feels borderline unimaginable that First Digital in Hong Kong, for example, could launch its stablecoin, FDUSD, with regulatory approval, when fintech mainstays like PayPal face subpoenas for doing the same in the US.

This "Asia speed," as we at Serotonin affectionately term it, is a testament to the region's rapid adoption and contribution to Web3 technologies. I believe this dynamic will steer the upcoming bull market and introduce a geographical narrative to the crypto cycle.

However, I foresee this scenario changing in about 18 months, post the next U.S. election. I expect regulatory clarity for crypto in the U.S. to emerge, sparking a new cycle of enterprise adoption and marketing to U.S. consumers. This period will also see the re-emergence of the U.S. as a primary driver of Web3 innovation and adoption, contributing to a thriving global Web3 ecosystem, with leadership from Asia and other markets.

In the meantime, our strategy is to use this time to grow our business with a focus on Asia. We're facilitating Western projects' entry into Asian markets, forming partnerships with Eastern-originated projects to go global, and connecting with English-speakers in Europe and the Middle East. All things considered, the crypto world is set for a more diverse and dynamic era driven by various global forces, with Asia leading the charge in the imminent bull cycle.