Markets are all about probabilities. We simply never know the future, and all we have are correlations, historical performance, and fundamental relationships to help identify a likely path forwards.
‘This time is different’. I hear this phrase called many things, ranging from being a meme, to being the most expensive four words in finance. It is such a fascinating concept because it ALWAYS feels different at the time.
- The 1987 stock market sell-off was the end of the world
- So was the 2001 dot com bubble
- And the 2008 GFC
- Covid was the end of times
- 2022 is surely when it is all over
- Bitcoin is dead (again!)
Without question, 2022 is probably going to be different. We are at the end of a long term debt cycle, and fiat currency is the likely scapegoat to protect sovereign bonds and financial stability.
That part is different, for sure.
But much is also the same. Politicians will see a can, and will attempt to kick it. When the first kick doesn’t work, they will kick it harder. Their boot is a big ball of currency debasement, and papering over the cracks. Debt levels remain extraordinary, and absolutely nothing has been done to resolve those issues. In fact, raising rates makes the situation worse as these debts become (even more) unserviceable.
When I read headlines like this…
…and this..
…and then I compare to a chart like this…
I am reminded of this.
Calling a bottom in Bitcoin during the 2022 bear market is a fools errand. Despite the plethora of indicators which resemble a textbook bottom. In today’s video we try to quantify the probabilities of this, and with 90% to 95% confidence, I can say we are bloody close.
My conviction in Bitcoin has never been higher. The thesis is unchanged.
Bitcoin is an asset.
Fiat currency is a liability.
I know which one I want right now.
P.S. Seriously prepare yourself, mentally and financially for the next 3-months. We could absolutely see disaster in global markets. Things are not well out there, and there will be volatility and pain. On a specific note, if you hold coins of any blockchain, at any appreciable $ size, which you are NOT planning to trade, please consider self custody. If you do not have a hardware wallet, strong recommend to get one, and use it (Ledger are great, Coldcard are better but BTC only and more technical). These are times where exchanges, custodians, and people go insolvent and fail. Better to be safe than sorry.
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