Bitcoin Is Languishing. What Could Shake Crypto From Its Lull—and When.

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Bitcoin
and other cryptocurrencies continued to languish at depressed levels on Tuesday amid a historic rut in trading.

What could shake crypto from its lull? Analysts at Bernstein are eyeing four possible sources of capital for a new crypto cycle.

The price of Bitcoin has traded flat over the past 24 hours at just below $29,400. The largest digital asset is languishing below the psychologically important $30,000 level, which had provided support for Bitcoin for months before a slide lower in late July.

Unlike the stock market, where the

Dow Jones Industrial Average
and

S&P 500
 have continued to provide excitement to investors, cryptos look, well, boring. Bitcoin is currently experiencing its lowest volatility on record, based on multiple metrics, in a trend that is beginning to unnerve some market participants.

“The market remains dull looking for the next big catalyst,” analysts led by Gautam Chhugani at Bernstein wrote in a note Monday.

What could that catalyst be? Ultimately, a significant and sustainable move higher—what Bernstein calls “a new crypto cycle”—will require new sources of capital. 

Chhugani’s team is looking at four major sources as possibilities: a growing supply of stablecoins that should come with regulation, the tokenization of traditional assets, the growth of native crypto infrastructure like “layer 2” blockchains atop networks such as Ethereum, and the approval of crypto exchange-traded funds (ETFs).

As for when these catalysts could come, it’s anyone’s guess . But it’s likely that even the first one could be weeks, if not months away. Investors are bracing for a decision from regulators over a spate of newly-filed spot Bitcoin ETFs, including from

BlackRock

(BLK), but the Securities and Exchange Commission just delayed a decision on yet another one.

Beyond Bitcoin,

Ether
—the second-largest crypto—was down less than 1% at $1,830. Smaller cryptos, or altcoins, also fell, with

Cardano
slipping less than 1% and

Polygon
dropping more than 1%. Memecoins also were in the red, with

Dogecoin
down 1% and

Shiba Inu
shedding 3%.

Write to Jack Denton at jack.denton@barrons.com