The current crypto market shares striking similarities with the leveraged and subsequent deleveraging environment of China’s A-share market in 2015.
In June 2015, after a leverage-driven bull market stalled and valuation bubbles burst, the market entered an A–B–C pattern decline, consistent with Elliott Wave theory. After the C wave bottomed, prices consolidated sideways for several months before transitioning into a multi-year bull market.
That bull market was driven by low valuations of blue-chip, improving macro policy, and looser monetary conditions.
BTC and the CD20 index have closely replicated this leverage and deleveraging pattern, including the timing and structure.
The underlying similarities are clear. Both environments featured high leverage, extreme volatility, peaks driven by valuation of bubbles and herd behavior, repeated deleveraging waves, grinding declines, falling volatility, and futures of contango.
Today, this contango is reflected in discounts of DAT-related equities such as MSTR and BMNR prices relative to their mNAV.
At the same time, macro conditions are improving. Regulatory clarity is advancing through initiatives like the Clarity Act. The SEC and CFTC are actively promoting on-chain US equities trading.
Monetary conditions are easing through rate cuts, the end of QT, repo liquidity injections, and increasingly dovish expectations around the next Fed chair.