“Behold, I have engraved you on the palms of my hands.”
—Isaiah 49:16
*NOT FINANCIAL ADVICE*
It’s the most wonderful time of year: Crypto season. There’s nothing like it on the planet. And you’re lucky enough to be reading this stack while most people are flying blind.
Crypto boom cycles are when people go nuts, figuratively and literally, and new tech is unleashed into the digital money landscape, most of which will launch and crash in a matter of months or years while most of the world takes no notice. Some startups, however, will end up changing the game forever. For those paying attention and minding the space, there are gains to be made.
After a few months of buying pressure pushing Bitcoin and other tokens into the stratosphere, prices for the big winner this cycle (Ethereum, in my opinion) have settled back down to skyscraper height. If you’re willing to risk the climb to the top, there’s a good chance a rocket ship awaits, ready to take you to Mars.
The takeaway: We’re in a dip. And if I were looking to put my money somewhere, I would take a crypto bro’s advice and “BUY THE DIP.” It is unlikely there will be a better chance.
One reason is the halvening. The Bitcoin halving is an event that happens about every four years that inaugurates a new boom cycle. And guess what: The halving just happened this past week.
WHAT IS IT: “Bitcoin halving is a significant event in the Bitcoin network where the reward for mining new blocks is halved, thus reducing the rate at which new bitcoins are generated.” [SOURCE] What this means is that after last week’s halving, the number of new Bitcoin entering circulation about every 10 minutes through block rewards given to miners has dropped in half — from 6.25 to 3.125 BTC.
Thus, the growth rate of the Bitcoin supply has slowed. Theoretically, this aids in scarcity and drives price growth. Historically, Bitcoin has indeed seen significant price increases after every halving.
Those thin black vertical lines in the chart above mark a Bitcoin halving event. Notice how soon after the halving (weeks or months thereafter), things trade sideways for a bit and then take off. There’s no guarantee the fourth halving event will have the same effect, but history speaks volumes. Bitcoin go up > entire crypto market go up.
The second signal is the inevitable Ethereum ETF. While things have hit a snag due to a new lawsuit brought by the SEC, they have zero chance of winning. It may delay approval, but it will not stop it.
As always, government agencies are playing hardball with things that they either don’t understand or feel pose a threat to their power and to the corporations that have captured them. It is amazing how much innovation a bureaucracy can crush or derail. Crypto would have taken off long ago if not for the endless lawsuits brought against it by your own government.
The ETH ETF is coming. We saw significant price movement with the Bitcoin ETF—to the tune of about +$20K in value—and the ETH ETF will likely see similar upward movement that is proportional to its own market cap.
The third signal is tech. New L2s like Base (started by Coinbase) and Blast (started by a dude named Pacman) are unleashing cheaper networks to trade crypto. These L2s interact with the Ethereum network, and Ethereum accommodates them through updates that reduce fees for the L2s when they interact with Ethereum’s base layer. Since Ethereum cannot easily reduce its network fees, its new Blob-L2 system is a step toward acknowledging that L2s acting in conjunction with Ethereum are the way of the future.
These L2s and affiliated tech ventures are deploying new games, partnerships, and incentives to bring in everyday investors on chain. Just look at the gains Base and Blast are making on the rest of the L2 market. As things start to pop off and the Bitcoin halving takes root, look out for things to go BOOM.
The fourth signal is sentiment. Where is it?
Ask yourself, how many normal people in your life are raving about buying crypto right now? Nobody. That’s a good sign. We haven’t hit mania phase, yet. The biggest gains come during a lack of enthusiasm. Enthusiasm comes when people missed the train and still believe another train will be waiting to take them to Valhalla.
When everyone hops on that final train, believing with absolute confidence but not knowing for sure that it will take them all the way, that’s when things go bonkers north and bonkers south. I wouldn’t be surprised if we see $90,000 Bitcoin and $6,500 Ethereum. That’s when you look to that timeless advice, courtesy of Vault-Tec:
Never be ashamed to sell at a profit and get out of dodge. There’s no shame in it, and in fact there is only pain in staying too long.
I leave you now with the three vital acronyms of crypto posting:
*NFA — NOT FINANCIAL ADVICE*
*DYOR — DO YOUR OWN RESEARCH*
*WAGMI — WE ARE GONNA MAKE IT*