Days of Doom Past
disclaimer:
I started this off as a thought on current market and where we are heading but as I finish it I feel in my quest to explain my thinking I have turned it into an autobiography!!!! I apologize in advance if anywhere I sound pompous as that wasn't the intention.
Nothing is as seasonal as the work-life balance in crypto-sphere. Beauty of the bear market is plethora of opportunity to concentrate on life; enjoy time with family, recoup the lost sleep and research. This time is definitely not different. The crypto community continues to quietly be pacing forwards and number of substack articles keep being rolled out (at a greater speed than they were during the bull market). However, podcast world indeed have decreased or stopped their VC speak! Long term players are still seen to be working away; and drama continues to build in ETH world (e.g. Yuga Labs; whose projects include Bored Ape amongst other NFTs just did an airdrop last night that cost folks 2 to 3 ETH to claim it. They then proceeded to blame ETH network for high fees with a threat indicating they are thinking to move ApeCoin to a different blockchain!!!).
If one is looking for long only trades they can still find them in tokens such as GMT and APE; similarly short only is full of many other alt coins. Nevertheless, I for one will simply nibble all the way down to $10k or whatever comes for BTC (and similarly grotesque price levels for ETH). Timeline to exit these would be incrementally over 2026 till 2031.
Why 2026 and 2031 dear crypto fanatic you may rightly ask? As a follower of Satoshi I sense there is a method to his madness that are the halving cycles. Moreover, with my very basic understanding of rates & economic activity cycles its becoming evident we all must wade through the mud of pain before we get anywhere close to glories of a bull market. I am no expert on macro or even micro but i do keep very granular personal spending data over many years as part of my own personal accounting. I personally don't feel comfortable with the levels of costs and I fear for those much poorer than me. The pendulum of pain has already swung through the lower income groups and is probably half way through middle income before it arrives at the doors of higher income.
Duality of a nomad: A weird aspect of my past is that through the sheer luck of birth I happen to belong to "influential" clan of a third world country. Moreover, as a descendant of immigrants to West of 1960s I am middle class; no wealth, except ~£50, was moved from origin country to West - because majority of family stayed back there and to this day still does. Practically speaking I am part of 99% in West - i.e. I work, I get paid and I live on that only - no extra cushion of wealth. Therefore I see and feel the pain of this inflation. On the flip side, in my ancestors' origin country, simply by standing on shoulders of 4+ centuries of ancestors I get to live and experience the machinations of the upper class. Last time this band of "big wigs" felt pain was between 1940s & 1950s. Ever since there had been some ups & downs but nothing too dramatic. This year I notice a shift in their habits after a very long time - for instance during the year we give away food to hundreds if not thousands of families. This year when I enquired about the plans I was met with radio silence. Silence not due to lack of money (yet) but lack of trust in those who will do the hard work of distribution. Yes, the "big wigs" don't do any work - they simply order underlings to do so. Yet - trust in underlings is waning due to the pain those in middle / low income are facing. Now "big wigs" must decide whether to increase the income of underlings or squeeze through the pain. This prism of sorts is a comical journey since it allows me to see the world from two different perspectives.
Long story short; something seems off and only time will tell. In my mind this phase seems to be in years and not months. Thus, my belief in Lord Satoshi's 4 year cycles anchors my outlook and timeline. Of course, it doesn't hurt when Arthur thinks similarly
Arthur HayesCorrelation 1 - reborn: Now going back to thoughts of 27 March. I see SPY has breached the 200-2day moving average. How long will it stay below and how will crypto market react? A capitulation event would be beneficial in seeing how serious some of the traditional players are about crypto especially bitcoin; e.g. Goldman's bitcoin backed lending facility - https://www.bloomberg.com/news/articles/2022-04-28/goldman-offers-its-first-bitcoin-backed-loan-in-crypto-push
Indeed, in certain places preparation for doom can already be seen; e.g. announcements by crypto.com with regards to their Visa card cashback rewards programme - https://crypto.com/product-news/crypto-com-visa-cards-update
