Have you ever wondered what really drives the crypto market? I have thoughts on it but to summarize and finalize it is another matter [before I read the article from MILKMAN].

Today, we will look at the five core factors that are shaping this market and predict its future. These are the main "engines" that make the market operate and determine the upcoming fluctuations.

1. Innovation

Innovation is the lifeblood of the cryptocurrency market. It creates new use cases, attracts users, and increases demand for tokens, which in turn drives asset values. Technologies like DeFi and Layer 2 are prime examples of this.

Conversely, a lack of innovation is like a car running out of gas – the market stagnates and loses momentum. 🚗💨

2. Regulations

Clear regulations create a safe environment for users and help attract institutional investors. When regulatory policies are transparent, the market thrives on investor confidence.

But if the regulation is too strict, it can cause the market to "lose steam". Remember China's ban on cryptocurrency trading in 2021? The market immediately fell sharply, especially Bitcoin.

3. Macroeconomics

Government monetary policies also have a significant impact on cryptocurrencies. When quantitative easing (QE) is implemented, new money flows into investment assets, including crypto, often causing prices to rise.

Conversely, when interest rates rise and liquidity tightens, investors tend to withdraw to safer assets, causing the crypto market to temporarily weaken.

4. Stories (Narratives)

A good story about a new coin or technology can attract strong market attention, even when the fundamentals are not solid. Take the NFT craze of 2021, for example – many people rushed to invest without knowing whether the project had real value or not.

But if that story isn't backed by real innovation, it's nothing more than a bubble, waiting to burst. 🎈

5. Element of Surprise (War, Currency Collapse, Attack and Fraud)

Unexpected events like wars, currency collapses, or cyber attacks can cause panic in the markets. But on the other hand, in these uncertain times, Bitcoin often becomes a safe haven asset, and its price can skyrocket.

However, scams and cyberattacks have the opposite effect – they erode user trust and make regulators think about stricter regulations.

Conclusion: Liquidity is the Key

To make a delicious “pie” out of the crypto market, we need innovation, clear regulation, a strong narrative, and economic stability. But the most important ingredient for it all to work effectively is liquidity.

From now until September 2025, global liquidity is forecast to continue to increase, creating a great opportunity for the cryptocurrency market to explode strongly. This could be the golden time to enter the market!