This is the 3rd Crypto cycle I’ve been writing about here on Forbes and so far, as you can check, I’ve been a bull at the bottom and a bear near the top. The thesis has been simple. Bitcoin drives the whole crypto space and the halvening drives the price of Bitcoin. Crudely Bitcoin doubles because of the halvening which cuts in half Bitcoin new issuance. There is always a lot of narrative and boosterism that writes the blah, blah to make the rise seem more romantic and complicated, but my simply theory has made me enough return to ignore the noise and keep it simple. The cut in supply drives and boom/bust cycle, where BTC goes up like a rock and comes down like a rock and so far that seems all I’ve needed to consider.
Here is a chart of it.
So you can see the cycles clearly here and the procession. The circles are the sort of levels I expect Bitcoin to fall to and the higher the value the more likely it is in my opinion to be reached. I think sub $30,000 is unlikely but it is hard to judge in these hyper volatile times.
This cycle is not fate and as you can see in the cycle of 2021, events can step in and disrupt the progress. In this case its good to recall the Bitcoin is for flight and that is to say, if a country goes up in flames, the rich will buy crypto so they can flee without having an excess baggage problem and a lot of explaining to do at the airport at both ends. Bitcoin is the way to move large amounts of capital now that cash is anathema. However, I’m not a believer in trading on hope, I wont ‘hodl and pray’ even if there were chances of such an event in the near future and we can see from the past, after the Afghanistan pull out Bitcoin rally had ran its course, Crypto fell back to the sort of low levels you would expect from the basic boom/bust halvening cycle.
This is roughly how Im expecting it to play out: Again this is simply a road map and if the price breaks materially away from this kind of development then ‘happy days.’
The narrative to this crash will of course be all about the likely stock market crash currently being triggered by the conniptions coming out of the US administration. The stock market is at correction levels right now but its likely going to get much worse. Its going to be a neat trick to pull the world out of a flat spin of FUD caused by the huge shifts of US economic and political policy gushing from Washington.
If these developments are additional in impact to the natural Bitcoin cycle then the lows could be epic, but once again, we have the road map for a crash and we can judge if its sticking to it or not.
There is one thing however to embrace if you think I’m not being overly bearish, that is, ‘not your keys, not your Bitcoin.’ Remember 2021. If this crash plays out then many Crypto ‘institutions’ will fold. We should realise that most crypto ‘institutions’ really aren’t ‘institutions’ at all, they are just collections of unreformed Crypto bros that have benefitted from survivor bias and should not be confused by Federal Reserve regulated banks and such like. My catch phrase of the moment is ‘risk assets only appreciate as risk decreases.’ Look out below.