I don't believe market pundits. I don't believe crypto vloggers. I don't believe almost anyone. I believe in Douglas Adams and the two most important words he wrote. Don't panic. And I'm going to tell you why. This isn't hopium. It's calm-the-fuck-down-ium.
As long as we can agree on this one basic thing, I think we'll agree on the rest. Cryptocurrencies have proven to be a long-term sustainable marketplace. I say this not only because of it's decade plus long ability to grow, but also because of it's now moving into government and large-scale business trades. There are going to be countless prop-ups and setbacks, as every market has.
Every market. Stocks are only one. Real estate, commodity trades, lending, antique/etc., every kind of market sees growth, setbacks, periods of uncertainty, periods of near-collapse, etc. Crypto isn't any different - and that's important. Because your opinions of macro-scale events in crypto will most likely be tempered by your outlook on investing in general.
The most obvious comparison is to the stock markets. Every one throughout time has been different, but the NYSE is a good example of how major events and differing periods have changed over time. And the cool thing is, we've got a good 200+ years of data to use. And on a macro scale - that's fucking enormous!
I totally stole this image. But it's a great representation of markets within the NYSE over it's entire existence. The one single thing that it has always done, is grow. It's got no reason not to.
https://www.visualcapitalist.com/200-years-u-s-stock-market-sectors/
Major events are pretty visible, the Civil War, the Depression, the dot/com boom, etc. (Check out the real estate pinch in '08). Point being - it's always changing. And this is just the markets within the market as a whole.
We don't have the best data for the 1800s. It exists, but I'm not going to pay for the good datasets. So I'm going to pick it up at the 1900s with the DJI.
https://stockcharts.com/freecharts/historical/marketindexes.html
Again, you can see all the major events pretty clearly. When you zoom out, the Depression was a correction. The 40's were slow recovery. The 50's were back on pace. The 60s were a boom. The 70s were a correction. The 80s and 90s were to the moon. And then the game changed entirely. And that's where we come in.
Since the early 2000s, market movements haven't been in decades (as seen above). They've been in years. And even more recently, they've been in months. There are a million reasons why, and I'm not here to argue about those - that's not for crypto. Crypto is just feeling the ripples of these movements. But knowing the context helps put crypto movements in a much better perspective.
The stock markets aren't flinging around pocket change anymore. We're on a fucking rocket. And we have been, since 2009. Everything took off in 90s. 1995 to be specific. And that bull trend didn't break, even with the war starting in the early 2000s, until midway through the '07-09 recession. Then, you can argue it however you want. Overcorrection? Probably, but we took the fuck off. And the only thing so far that has really stopped us hard has been the beginning of the pandemic. Recovery throughout the pandemic, at least in the markets, has been insane. In the last ten years, the beginning of Covid-19 is the only major market setback, and we already recovered. The recovery is the issue.
And now we find ourselves here.
These last two years have been crazy, right? Insane bull runs. Huge recovery. Didn't break trend until June '21. And now we've found ourselves (stock market-wise) in a consolidation period with some pretty strong support at 34000.
Now, if you ask me - and I know you didn't, the growth over 2019 was far more sustainable. We shoved everything at pandemic recovery and FUD. And we rebounded insanely fast. Like, too fast. You can argue the recovery from 2008 took too long at 5+ years, but you can't argue it didn't maintain it's growth. And then, IMO, the previous administration decided to play casino and the markets ran with it. And then, within a couple of years, it all caught back up with itself into some mild correction. And then the pandemic. And you can see the crazy fast recovery has tapered and left us kind of sitting around 35,000.
So, why the fuck does all this matter?
BECAUSE CRYPTO IS BRAND FUCKING NEW. You've spent a decade in crypto? Sweet, me too. You know what that means? Absolutely nothing. Because go take a look at the first chart again of market sectors. NOTHING IS EVERY STATIC. EVER. And crypto did something most markets can't pull off in their infancy, it created massive sub-markets that have continued to grow. Crypto isn't just BTC. It's blockchain. It's far bigger than just BTC, even though we'll use BTC as a metric for decades to come still.
The stock markets grew from finance, to mainstay transportation, energy, and a host of other major submarket sectors. Crypto has been doing the same, at an accelerated pace. From simple finance, to logistics, to defi, to web3, to now meta, and who the fuck knows what's next. Markets will never fail as long as one thing remains true - it's profitable. And they are.
This is what happens when crypto goes from being Bitcoin to being an entire market capable of sustaining multiple projects, multiple directions, and un-ending potential. You almost don't even need to change the titles on the first chart to believe it's what's happening to crypto. Diversification.
Here's my last chart, I swear. And it will hopefully put crypto into perspective. What has happened in the last two years. It's not 2013. It's not 2018. It's almost not even 2021 anymore.
I left time boxes on because it's pretty much the only way to identify the stock market exists.
Don't panic.
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