Asset manager and Bitcoin ETF issuer Grayscale believes that current market conditions indicate that the industry is in the “middle” stage of a cryptocurrency bull run. They have released a comprehensive report detailing key findings and insights for the future.

Grayscale highlighted several key signals that the market is currently in a bull run, including Bitcoin's price surpassing its all-time high, the total cryptocurrency market capitalization reaching its previous peak, and traditional finance's growing focus on meme coins .

To understand how long this rally might last, Grayscale focused on two specific price drivers: spot Bitcoin ETF inflows and strong on-chain fundamentals.

Grayscale noted that approximately $12 billion has flowed into Bitcoin ETFs in the past three months, indicating significant “pent-up” retail demand. Additionally, ETF inflows have consistently exceeded BTC issuance, causing upward price pressure due to the imbalance between supply and demand.

Their research also looked at three key on-chain metrics: stablecoin inflows, decentralized finance (DeFi) total value locked (TVL), and BTC outflows from exchanges.

Recently, the stablecoin supply of CEX and DEX has increased by approximately 6%, indicating increased liquidity, making more capital available for trading. Since 2023, the total value locked in DeFi has doubled, representing increased user participation, increased liquidity and improved user experience in the DeFi ecosystem. In addition, outflows from exchanges currently account for approximately 12% of the circulating supply of BTC, indicating that investors are increasingly confident in the value of BTC and prefer to hold rather than sell.

Based on these catalysts, Grayscale believes the market is in the "mid-stage" of a bull market, likening it to the "fifth inning" of baseball.

Grayscale’s analysis is supported by multiple key metrics, including the net unrealized gain and loss (NUPL) ratio, which suggests that investors who purchased BTC at lower prices are continuing to hold on despite rising prices. Additionally, the Market Value Realized Value (MVRV) Z-Score is currently at 3, meaning there is still room for growth during this cycle. The ColinTalks Crypto Bitcoin Bull Index (CBBI), which combines multiple ratios, currently stands at 79/100, indicating that the market is approaching its historical cycle peak but still has some upward momentum.

In addition, lower crypto YouTube subscriptions and lower Google Trends interest in “cryptocurrency” compared to the previous cycle prove that retail interest has not yet fully recovered.

Taking into account the promising signals and analysis outlined in the report, Grayscale maintains a “cautiously optimistic” stance on the future of this bull cycle.