Tears from the moon

Somethings are pure coincidence and somethings are daydreams coming true. First crypto bear market I met my partner. Second bear market we had our first child. Now third bear market second child arrived. In reality there is no pattern to this except bear markets are time to go spend more time with family and friends. Detox and rest for as humans we will see opportunities again - yet we don't feel that when sitting in depths of market or political turmoil. So to entice my brain away from the doom loop on the screens and in news I am imagining up-front the next year or two.As someone who apparently studied stochastic processes, machine learning & easily sleep walked through A-level maths; I am a disaster at making sense of greeks, skew & volatility curves for capturing those left/right tails that the twitterati & podcast pundits keep shelving out.

So herein I split my non-mathematical thoughts into 2 scenario:

• Bear-me-up till 2028....
  • If crypto history is anything to go by; I would expect all the "hopioum" of traditional markets buy-the-dip participants to have their resolve tested. For now everyone seems to be either full bear or averaging down for a rally up. However, market deserves respect and for far too long it's been too easy so why not a gruelling and cruel whipsaw of momentum ignition sort of moves up and down until it just looks like a flat line for a year. Ideally this "crab" market would continue until folks exit due to boredom or having been chopped up.
  • During same time let crypto (especially Bitcoin and ETH) bleed another double digit percentages (but continue to show signs of volatility to entice participants from traditional markets over). Make them suffer with a fake bull run and eventually through another 6 months of boring flat lining price. This would bring us around Q1 2024 however in order to be truly evil why not repeat the pattern of first crypto bear market and keep the prices subdued little while longer into Q3 2024 (way past the next Bitcoin halving event to put to question any crypto analysts looking for a post-halving bull run) and not gain any public attention / imagination until 2026.
• Happy Valentines???
  • Much has occurred over past months that still needs digestion. On top of big players being liquidated, many "experts" & industry financiers are looking like degenerate gamblers. Additionally, we are now discovering the long arm of sleepy regulators reaching out and conducting arrests of even the open source coders such as Alexey Pertsev (https://finance.yahoo.com/news/alleged-tornado-cash-developer-alexey-093657198.html) of Tornado Cash.
  • Therefore, as far as crypto is concerned only overhangs remaining are now
    • Traditional markets
    • MtGox distribution of 160k BTC - this will have at minimum 2 distributions
      • early payment - given litigation can continue for another decade there is a discounted option of early payment
      • final payment - remaining creditors who didn't take early payment will wait out for all litigations to close out. Fortress LLC is one of those creditors who will wait till the end
  • Traditional markets definitely need a deep wash equivalent of what Bitcoin suffered. Cannot have a gamblers den wiped but not the source of that impulse of wealth. Moreover, as we saw this week; its rather eye opening how similar the crypto strategies are to UK pension funds leveraging up on Gilts in a rather circular fashion. This shows we are not that different and must await our collective humbling - I just hope its orderly.
  • Currently, the next Bitcoin halving is estimated to be in 502 days which as of today weirdly falls around February 16 2024. What if?
    • Traditional markets become boring
    • Fiat (including USD) decides to stop its volatile run and becomes boring again. Many crypto traders are ex-FX traders; and for sure some have already flipped back to FX
    • Crypto on other hand attempts a bull run pre-halving around late Q1 2023; fails and wobbles back down due to MtGox distribution news. Depending on statistics that will start to get leaked with regards to distribution size, the wobble in prices will dictate whether we must await Q1 2024 for a sustained bull run. Volatility in this space will entice larger participation if traditional markets and fiat are subdued for the rest of the decade.

Both are similar in terms of bearishness for a long while but one hopes crypto recycles upwards and provides the impulse needed to kickstart upwards momentum. Now all this of course will change if Fed pivots or some major
geopolitical events trigger some additional turmoil. Nevertheless, this 2 year timeline at-the-very-least provides me mental framework in terms of how and when I may wish to completely allocate into BTC / ETH spot. I have already 30% allocated whatever I am willing to keep for the next decade.

In other news:

• Bitcoin miners seem to be copying the playbook from OPEC by increasing their mining hash rates into a down market. Seems like a game of chicken where already some are filing for bankruptcy (e.g. Compute North, the second largest bitcoin mining hosting provider in the US.

Bitcoin Mining’s First Major Bankruptcy Creates Uncertainty For Key Partners, Opportunity For Others

Compute North, the second largest bitcoin mining hosting provider in the US, filed for Chapter 11 bankruptcy last week. More are likely to follow.

ForbesColin Harper

• ETH has started to have many OFAC compliant blocks - i.e. where any sanctioned ETH address is not having its transactions completed. State captured or entering the realm of traditional finance?
• Solana died again for couple of hours! One misconfigured node led to whole network needing to be restarted!
• Market pundits, tiweratti & podcaster fights:  ETH & BTC proponents have fallen silent after publicly fighting each other up until the merge. Instead they are now fighting within their own space which at least will lead to some convergence eventually (e.g. ETH's dilemma of acting like its decentralised but abiding by censorship such as OFAC compliance needs). Now, I see similar sort of fights occurring between traditional markets' players regarding their long /
  short thesis. Only constant is the disdain each side has of the other (crypto folks feel traditional markets will be wiped clean and out of its ashes BTC/ETH shall appear). Whilst, traditional markets folks are betting on crypto trending to zero since its all a ponzi scheme.
• Lots of enhancements being proposed in the Bitcoin space that I must one day attempt to gather my thoughts around as the strands of privacy, state capture & trust become central discussion items over the rest of the bear market; e.g. Fedimint - custody solutions - https://bitcoinmagazine.com/technical/fedimint-adds-new-bitcoin-custody-solutions

I leave you with Lord Satoshi's bitcoin genesis block one liner; The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.