It's been a while since I've done a bit of a deep-dive on this market and why I don't believe it'll sustain a significantly higher value in the future. I no longer have the stamina to write a long-winded post. It's exhausting at this point, and I don't need to reiterate it. Instead, I'll summarize recent developments and their impact on the crypto narrative.
1) The TOTAL crypto market cap currently rests below the all-time high from 2021. This is even including stablecoins. There is $144B worth of USDT currently in circulation. In 2021, that number was $80B. Meanwhile, stock indexes and several individual stocks are significantly up from their last peaks. From a "store of value" standpoint, this doesn't look great, particularly factoring in inflation. Adjusted for inflation, Bitcoin itself is sitting below its inflation-adjusted 2021 all-time high, which is around $84K.
2) Bitcoin active addresses are back to 2017 levels and BELOW the levels from even the previous bear market! This implies that "authentic" adoption has stagnated and begun a decline. studio.glassnode.com/charts/addresses.ActiveCount?a=BTC
3) In the eyes of a growing number of investors, Trump and Elon's crypto push has only solidified the crypto market as a joke and as a global symbol of greed and corruption.
4) Gold has far outpaced Bitcoin as a store of value during this recent period of turbulence, disproving Bitcoin as a possible safe haven. Here is the Bitcoin/Gold chart for reference:
5) Still, if cryptocurrencies completely ceased to exist, there would be no net-negative effect on the world. In fact, it may be a net-positive. Unless this suddenly changes, crypto does not have any real world value. You cannot say this about most
1T+ markets: If most major companies and resources ceased to exist, we'd see a very significant (mostly negative) impact on our daily lives, almost immediately.
In summary, I don't think people will be coming in droves to invest in this market. I think that ship has sailed. The opportunity for it to prove itself has waned, and it has been overtaken by largely bad actors. If anything, I think people are more likely to be forced to buy it than enter the market willingly.
From a technical standpoint, a breakdown from the big uptrend channel in the chart above would likely confirm that the top is in.
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Beware, a crypto narrative still exists, but it's only the one fed to us by those in power. It will be important not to fall for it. I worry that people will be forced to own cryptocurrencies, at the expense of their freedom. And even in a situation where crypto prices continue to increase, it is unlikely to be seen positively.
Once we graduate from these strange and confusing times, rife with dissociation, monopolies, grift, and power consolidation, it seems more likely that humanity will look at crypto as part of an uncomfortable past. If we never move on to more optimistic times, and things continue to become more dystopian, well, then that would be a time where crypto adopters can say, "hey, we were right!" But...at what cost?
Regardless, it will always be possible to profit from the volatility, hence my attempts at trading a little recently, with a focus on Litecoin. So, trading opportunities will present themselves, which will keep at least some people interested in this market. I think it is unlikely to be enough liquidity to sustain significant new all-time highs.
Here is my last big post, where I detailed more reasoning - this was prior to the Bitcoin ETF's:
And here is a recent post, where I describe how my own thoughts about the market evolved, from when I first entered in 2017 to the present:
As always, this represents only my opinion, and is meant for speculation and entertainment only, not as financial advice. There are many other opinions out there. It is your responsibility to develop critical thinking.
Thanks for reading as always!
-Victor Cobra
1) The TOTAL crypto market cap currently rests below the all-time high from 2021. This is even including stablecoins. There is $144B worth of USDT currently in circulation. In 2021, that number was $80B. Meanwhile, stock indexes and several individual stocks are significantly up from their last peaks. From a "store of value" standpoint, this doesn't look great, particularly factoring in inflation. Adjusted for inflation, Bitcoin itself is sitting below its inflation-adjusted 2021 all-time high, which is around $84K.
2) Bitcoin active addresses are back to 2017 levels and BELOW the levels from even the previous bear market! This implies that "authentic" adoption has stagnated and begun a decline. studio.glassnode.com/charts/addresses.ActiveCount?a=BTC
3) In the eyes of a growing number of investors, Trump and Elon's crypto push has only solidified the crypto market as a joke and as a global symbol of greed and corruption.
4) Gold has far outpaced Bitcoin as a store of value during this recent period of turbulence, disproving Bitcoin as a possible safe haven. Here is the Bitcoin/Gold chart for reference:
5) Still, if cryptocurrencies completely ceased to exist, there would be no net-negative effect on the world. In fact, it may be a net-positive. Unless this suddenly changes, crypto does not have any real world value. You cannot say this about most
1T+ markets: If most major companies and resources ceased to exist, we'd see a very significant (mostly negative) impact on our daily lives, almost immediately. In summary, I don't think people will be coming in droves to invest in this market. I think that ship has sailed. The opportunity for it to prove itself has waned, and it has been overtaken by largely bad actors. If anything, I think people are more likely to be forced to buy it than enter the market willingly.
From a technical standpoint, a breakdown from the big uptrend channel in the chart above would likely confirm that the top is in.
---------------------------------------------
Beware, a crypto narrative still exists, but it's only the one fed to us by those in power. It will be important not to fall for it. I worry that people will be forced to own cryptocurrencies, at the expense of their freedom. And even in a situation where crypto prices continue to increase, it is unlikely to be seen positively.
Once we graduate from these strange and confusing times, rife with dissociation, monopolies, grift, and power consolidation, it seems more likely that humanity will look at crypto as part of an uncomfortable past. If we never move on to more optimistic times, and things continue to become more dystopian, well, then that would be a time where crypto adopters can say, "hey, we were right!" But...at what cost?
Regardless, it will always be possible to profit from the volatility, hence my attempts at trading a little recently, with a focus on Litecoin. So, trading opportunities will present themselves, which will keep at least some people interested in this market. I think it is unlikely to be enough liquidity to sustain significant new all-time highs.
Here is my last big post, where I detailed more reasoning - this was prior to the Bitcoin ETF's:
And here is a recent post, where I describe how my own thoughts about the market evolved, from when I first entered in 2017 to the present:
As always, this represents only my opinion, and is meant for speculation and entertainment only, not as financial advice. There are many other opinions out there. It is your responsibility to develop critical thinking.
Thanks for reading as always!
-Victor Cobra
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.