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The debt cycle theory acts as a foundational layer upon which various other cycles—such as business cycles, credit cycles, and market sentiment—interact and converge. Following the fluctuations through recent years, the cycle saw significant liquidity from quantitative easing and low-interest rates leading into the crypto peaks of past bull runs.
Historical Context of Crypto Bull Runs
Historically, major crypto bull runs align with specific phases of the debt cycle:
2013: Following the QE initiatives post-2008 crisis, Bitcoin surged from $13 to $1,100.
2017: Despite the Fed inching toward rate increases, the environment of low rates allowed Bitcoin prices to inflate from $1,000 to nearly $20,000.