After some positive regulatory news, relative quiet on the legal front and a surge in token prices, investors and advisors may wonder if the thaw is here and a prolonged “crypto winter” may finally be over.

The man who founded Edelman Financial Engines, the largest U.S. RIA by assets under management, believes it is.

“The crypto winter is thawing fast, and soon we’re going to be in the crypto spring,” wrote Ric Edelman in a blog post earlier this year. “Bitcoin’s price is already almost doubled from its low, and many are predicting that it’s going to double again within the next several months.” Edelman, who stepped away from his role as chairman of Edelman Financial Engines a couple of years ago, has turned his attention to cryptocurrency and currently acts as CEO for the Digital Assets Council of Financial Professionals.

The crypto winter has been a long one, its beginning marked by bitcoin’s previous peak, the all-time high of $68,789.63 set on November 10, 2021. The price receded slowly until hitting a low of less than $16,000 in November 2022, a 76% decline from its high. Through that period, the crypto industry weathered several business failures linked to declines in investor interest and a few major scandals, including the collapse of crypto exchange FTX and the conviction of its founder and CEO, Sam Bankman-Fried, for fraud charges in the U.S.

Over recent months, however, there’s been a surge of optimism about the crypto universe, not in small part due to the recovery of token prices. Edelman’s argument, which he most recently made in an October blog called “Here’s Everything You Don’t Know About What’s Happening in Crypto,” is founded, in part, on faith that U.S. regulators will soon approve spot cryptocurrency ETFs, funds that will track the prices of major tokens like bitcoin and ethereum. 

In August, Grayscale Investments, manager of the Grayscale Bitcoin Trust (GBTC), won litigation against the U.S. Securities and Exchange Commission, and a federal judge ordered the agency to give an up-or-down ruling to the company’s application for a spot-bitcoin ETF within a reasonable amount of time. 

To people like Edelman, it’s now a foregone conclusion that Grayscale’s ETF will be approved at any time, as could nine other spot-bitcoin ETF proposals pending at the agency. Edelman went so far as to predict that bitcoin prices could climb to six-digit record highs by the end of 2024 if the products get the nod.

While observers wait (there was no word as of mid-November), in the meantime the SEC has approved ether futures ETFs, and a smattering of new products have joined the already available bitcoin futures ETFs on the market. The anticipation has extended to a spot ether ETF as well that would follow in the wake of the spot bitcoin product.

Edelman noted that the price of bitcoin has increased dramatically—having risen by 77% over the 12 months preceding his blog post; it had more than doubled in price over the 12 months ended November 11, from $16,778.10 to $37,086. Some think bitcoin may also have benefitted from the outbreak of war in the Middle East and what some see as its role as digital gold in an unstable world.

Edelman’s not alone in his enthusiasm. A week before his post, Morgan Stanley Wealth Management also weighed in, declaring that crypto winter was likely over. However, the bank offered different reasons in its October report, called “Will Crypto Spring Ever Come?”

Morgan Stanley described the crypto winter as a period in which investors have sold their tokens to lock in gains, which caused prices to drop and scared off new investment. The “spring” will come about in part because of a crypto shortage, caused by a phenomenon called “halving.”

Bitcoin miners are rewarded for producing the tokens, but after a set number of transactions are recorded in the blockchain, these rewards are cut in half—and thus so are the number of new bitcoins being created. Halving cycles will continue in bitcoin until there are 21 million tokens in existence, at which time no more of the coins will be mined. Halving tends to occur approximately every four years; the last time was in May 2020.

“By intentionally limiting the supply of new bitcoin, the shortage caused by the halving can affect the price of bitcoin to potentially spur a bull run,” Morgan Stanley’s analysts write. “There have been three such runs on bitcoin since its inception in 2011, each lasting 12 to 18 months after the halving.”

A predictable cycle in token prices occurs with a halving event—a trough usually follows 12 to 14 months after a peak, and winter’s end is usually marked by a 50% increase in price from the low. With the next halving event predicted to occur in April 2024, the bank argues we may already be in a crypto spring marked by recovering prices but weak investor interest. The next bull run could come after the halving, when “crypto summer” would begin.

Of course, since there have been only three halving cycles—and three crypto winters—so far, Morgan Stanley also cautions against relying too heavily on past events to predict the future course of token prices.

Global investment manager VanEck is another firm waiting for the approval of a spot bitcoin ETF. Its CEO and namesake, Jan van Eck, echoed Edelman’s and Morgan Stanley’s arguments in a recent podcast, saying that bitcoin’s halving event, coming at the same time as a possible slew of nine (or more) spot bitcoin ETFs onto the market, make for “a very exciting spring” for cryptocurrency investors.

The spring fever around token prices, ETFs and halving may brighten sentiment toward cryptocurrencies, but it leaves unanswered the most pressing concerns of financial advisors, including the ways cryptocurrencies are best accessed and safely custodied, and how the various forms of income and returns available from digital assets will be taxed—not to mention whether advisors should recommend digital assets to clients in the first place.