2.3.0. The Tertiary Wave
Some Developers will carry out another massive CCR on their crypto by burning the coins to reduce their circulating number in the market.
Cryptos like Bitcoin that already have an in-built halving technology will automatically reduce the number of coin circulation after 210 000 blocks have been mined. All these will begin to drive the price of the crypto upwards gradually.
However, note that the CCR alone is often not strong enough to push the crypto into the Tertiary Wave, which is the Third Wave.
The strongest factor that will push a crypto from a second dry season into the Third (Tertiary) Wave is the use case.
If the use case of the crypto is good and solid, many investors will become attracted to the project.
In other words, just burning the coin alone may not really result in a strong Third Wave price ascent. This is why some crypto projects often fail and fade away after their Secondary Wave.
The main reason is because they don’t have good use cases that will make them to remain relevant in the highly competitive Crypto Market.
2.3.1. Institutional Involvement
All along in the Primary and Secondary Waves, the main investors have been retailers. However, by the Tertiary Wave, institutions and high volume investors (referred to as “whales”) such as portfolio asset managers will be attracted to the crypto project.
A crypto project that survives into the Third Wave is one that has a good use case. The use case of the project attracts these institutions and high volume investors who feel they can make good profits with the crypto while offering services of good value to their customers.
Indeed, that is the story of Bitcoin. By the time Bitcoin reached its Tertiary Wave, which started in the last quarter of 2020, many institutions gradually began to get into the Bitcoin project. Global institutions like Visa, Robbin Hood, Grayscale, Blackrock, JP Morgan, etc., have started to buy Bitcoin at its Third Wave.
What attracted these global institutions?
The answer is that these institutions have started to see Bitcoin as a good digital asset for store of value with lesser difficulty and lower costs of maintenance in long-time storage than physical gold.
With such institutional patronage and the ever-increasing number of retailers seeking to make profits from the crypto, the Tertiary (Third) Wave will soon ride to a very high Peak, often as high as 1 000% above the Peak price of the Secondary Wave.
In fact, as at the updating of this article, Blackrock, a trillion-dollar rich company and the largest global asset manager, along with Grayscale, and some other large institutions were able to successfully apply for Bitcoin exchange-traded fund (ETF) and forced the government of the United States of America to approve the application.
Bitcoin ETF has been driving a surge in the price of Bitcoin. Apparently, other ETFs will soon follow.
The interesting aspect of this Third Wave is that as more and more institutions join in and because of the limited number of the circulating supply of the coin, the price of the coin will drive too high so much that these big investors will just have to find a way to share in the cake.
To do that, a kind of “horse trading” or “financial racketeering” occurs behind the door. Due to their huge money, these institutions will try to buy some of the coins and then flood the market with them by selling their holdings. This will dramatically drop the price of the crypto.
Retailers who don’t understand the psychology of the Crypto Market will become scared and sell off their holdings, thus, dropping the price of the crypto further.
With such drop in price, these institutions and high-volume investors will now have the opportunity to massively buy the coins while some others will try to pump down the price so that they can as well have a share of the cake.
2.3.2. Third Winter Season
Due to the limited supply of a crypto, a competitive fight among these institutions and high-volume investors will ultimately push down the price of the crypto, marking the commencement of the Third Winter Season, which is the Descent Phase of the Tertiary Wave.
However, note that the price of the crypto will not drop lower than the bottom of the Second Wave. In fact, the institutional money will attempt to bring stability to the price of the crypto by keeping its price at a level where they know will be comfortable for their financial goals.
This is the Plateau Phase of the Tertiary Wave.
As the crypto enters its third Plateau season, its market capitalization would have increased a lot, hence, the sharp fluctuations in price will be minimized.
In fact, as at the writing of this article, Bitcoin was in its Third Wave and about to come out of its third Plateau Season. Its market capitalization has grown massively during this Third Wave from mere billions to above one trillion dollars! Thanks to the involvement of institutions and high-volume investors!