This Crypto Cycle Is Different! Here Are The Cold FACTS!!

Summary

Highlights

• The current crypto market cycle appears different mainly due to the lack of rotation into altcoins. 🤔
• Historically, Bitcoin kickstarts the rally, eventually rotating profits into altcoins, but this hasn't happened yet. 📉
• Many early crypto investors bought altcoins too soon, without the anticipated retail wave to support prices. 😮
• There are speculations that a potential altcoin rally could be fueled by Trump administration's policies. 🚀
• Several narratives, like Bitcoin spot ETFs and macroeconomic conditions, have failed to account for altcoin woes. 📊

Key Takeaways

• This crypto cycle defies expectations with minimal altcoin rotation, stressing the disconnect with traditional four-year patterns. 🤔
• Early investors jumped the gun, expecting early altcoin gains that didn't materialize, causing a surprising market dynamic. 😮
• The perceived lack of new retail investors contrasts starkly with previous cycles, resulting in altcoin underperformance. 📉
• Speculation around future altcoin rallies hinges on potential catalysts like Trump administration policies and Bitcoin spot ETFs. 🚀
• Despite current trends, historical patterns suggest that significant altcoin gains could still be in store. 📈

Overview

Chapters

• 00:00 - 00:30: Introduction: The Consensus on the Current Crypto Cycle The chapter discusses the widely accepted view that the current crypto market cycle is different. It highlights that even usually silent observers agree with this sentiment, forming a consensus. The chapter questions what makes this market appear different and explores whether this perceived difference indicates that the market has reached its peak or if the peak is still forthcoming. The chapter aims to investigate why this cycle feels different and consider the possibility that it may not be as different as presumed.
• 00:30 - 02:00: Understanding the Crypto Market 4-Year Cycle The chapter titled 'Understanding the Crypto Market 4-Year Cycle' discusses the historical pattern of the cryptocurrency market, which operates on a 4-year cycle. This cycle is influenced by both cryptocurrency-specific and macroeconomic factors. On the cryptocurrency side, the Bitcoin halving event plays a crucial role, as it reduces the supply of new BTC by half every four years. On the macroeconomic side, the cycle is affected by global liquidity, also known as the money supply cycle, which is heavily influenced by debt refinancing needs.
• 02:00 - 03:00: Historical Patterns in Crypto Prices The chapter discusses the historical 4-year cycle in cryptocurrency prices, characterized by 1 to 2 years of price increases followed by the largest gains at the end of this bullish period, and then 2 to 3 years of falling prices with the largest losses occurring in the first year of the bearish period. Historically, prices tend to hit rock bottom approximately one year after reaching new all-time highs due to significant defaults on crypto debts.
• 03:00 - 04:00: Crypto Market Dynamics: Bitcoin vs Altcoins The chapter titled 'Crypto Market Dynamics: Bitcoin vs Altcoins' discusses the historical price patterns of cryptocurrencies, focusing on the timing of cycle tops relative to Bitcoin halvings. It highlights that crypto prices typically reach their peak about 18 months post-halving and that this is usually preceded by a rapid price increase over 2 to 3 months. It notes the last Bitcoin halving occurred in April of the previous year, suggesting a potential cycle top in October of the current year, with the parabolic phase occurring in the summer. However, the text also hints at the unpredictability and lack of obviousness of these trends to the average investor.
• 04:00 - 05:00: The Issue of Altcoin Rotation The chapter discusses the lack of the traditional rotation from Bitcoin (BTC) to altcoins in the current crypto market cycle. Historically, crypto bull markets began with a rally in BTC, which eventually led investors to move capital into altcoins, starting with Ethereum (ETH) and then to other more speculative altcoins. However, this expected rotation has not occurred this time, as ETH and other altcoins have continued to decline, creating a significant disconnect between BTC and altcoins.
• 05:00 - 07:00: Narratives Explaining Altcoin Underperformance The chapter discusses the contrasting performances of Bitcoin (BTC) and Ethereum (ETH), along with other altcoins during a specific cycle stage. While BTC's chart aligns with expected bullish trends, ETH and many altcoins are underperforming as they fail to surpass their 2021 highs and appear on the verge of collapse. Many altcoins are hitting new bear market lows despite the presumed ongoing bull market in cryptocurrency. However, exceptions like XRP are noted.
• 07:00 - 10:00: The Role of Early Investors in the Current Cycle This chapter discusses the absence of altcoin rotation in the current investment cycle. Initially, the lack of rotation was attributed to the fact that only Bitcoin had spot ETFs, leading most inflows to go into BTC. However, after the approval of spot Ethereum ETFs in mid-2024, it became apparent that market structure wasn't to blame, as there was still no capital movement into ETH. The chapter continues to explore the evolving reasons and narratives behind this phenomenon regarding altcoin investments.
• 10:00 - 13:00: Retail Investor Arrival and Market Expectations The chapter explores the underperformance of altcoins, specifically focusing on the prevalence of memecoins and the misconception that an overabundance of altcoins is to blame. It points out that while the number of altcoins has significantly increased since 2021, most hold no economic value. In reality, the altcoins with actual economic value have grown by only about 40% since then, challenging the popular narrative that the proliferation of altcoins is responsible for their underperformance.
• 13:00 - 18:00: Comparing Crypto Cycles: 2021 vs Previous Cycles The chapter explores the differences between the 2021 cryptocurrency cycle and previous cycles. It challenges common myths, such as the saturation of retail investors in the market. Despite the presence of millions of crypto investors, they only represent 20 to 30% of stock investors, indicating room for growth. The chapter argues that other factors besides retail investment levels may explain the underperformance of altcoins and the differences felt in this cycle.
• 18:00 - 20:30: Early Investor Actions Affecting the Cycle The chapter discusses the significant role that early crypto investors play in shaping the cryptocurrency market cycle. It notes the lack of movement from Bitcoin into altcoins in the current cycle, which deviates from historical patterns.
• 20:30 - 25:30: Potential Outcomes for Altcoin Performance The chapter discusses the unexpected performance of altcoins in the current cycle, despite common expectations. It highlights how, contrary to previous cycles, altcoins have shown a downward trend rather than an upward movement. A reason for this divergence that many people overlook is addressed: the broader awareness and understanding of the 4-year cycle among investors. These investors anticipate price increases following events like the Bitcoin halving, and they believe that rallies typically grow larger in the 18 months following such events.
• 25:30 - 30:00: Thought Experiment: A Possible Altcoin Rally The chapter explores the likelihood of a significant rise in altcoins compared to Bitcoin. It argues that the influx of new retail investors will primarily target altcoins, driven by factors such as the filing of spot Bitcoin ETFs by major financial entities like BlackRock in the summer of 2023. This event has increased the probability of ETF approvals, acting as a catalyst for crypto investment over the past 12 to 18 months.
• 30:00 - 31:00: Conclusion and Speculation on Future Trends The chapter discusses market trends and potential future movements in the cryptocurrency space, particularly highlighting the events towards late 2023 and early 2024, such as the ETF listing and the subsequent rally. It poses questions to the reader about their investment decisions in response to these events, probing whether they chose to invest in Bitcoin or altcoins and the reasoning behind these choices. The text suggests that many investors likely opted for altcoins due to their potential for higher returns compared to Bitcoin's already significant rise.

This Crypto Cycle Is Different! Here Are The Cold FACTS!! Transcription

• 00:00 - 00:30 this crypto market cycle is different that's what everyone has been saying even those who've kept quiet feel like it's true as a result it's slowly becoming the consensus view but why is that what exactly is it about this market that makes it feel so different and more importantly does this mean that the top is in or does it mean it's still coming today we're going to take a look at why this cycle feels different why it may not be as different as it seems and
• 00:30 - 01:00 what comes next my name is Nick and you're watching the Coin Bureau historically the crypto market has followed a 4-year cycle this 4-year cycle is driven by a combination of crypto factors and macro factors on the crypto side it's the Bitcoin having wherein the supply of new BTC is cut in half every four years on the macro side it's the global liquidity aka money supply cycle which is driven by debt refinancing wherein debt needs to be
• 01:00 - 01:30 refinanced every four to 5 years this creates a 4-year cycle wherein crypto prices rise for 1 to two years with the largest gains coming at the end of this bullish period followed by 2 to three years of prices falling with the largest losses happening in the first year of this bearish period in fact prices have historically bottomed roughly one year after they hit new all-time highs and this bottom is typically caused by a big default on crypto debts on the flip side
• 01:30 - 02:00 crypto prices have historically hit their cycle tops roughly 18 months after the Bitcoin hing and are preceded by a parabolic phase lasting 2 to 3 months for reference the last Bitcoin hovering took place in April last year based purely on this this theoretically means that prices could hit their cycle top sometime in October this year with the parabolic phase happening sometime over the summer but of course this doesn't seem evident to the average crypto investor and that's because of another
• 02:00 - 02:30 historical fact the crypto bull market would begin with BTC rallying eventually this capital would rotate into altcoins starting with ETH and eventually to other altcoins further down the risk spectrum so far we haven't seen this rotation in fact we've seen quite the opposite with ETH and altcoins continuing to fall this is the primary reason why so many people feel like this cycle is different the massive disconnect between Bitcoin and altcoins
• 02:30 - 03:00 if you look at BTC's chart it literally looks exactly like what you'd expect at this stage in the cycle by contrast ETH and most other altcoins haven't surpassed their 2021 cycle highs in fact ETH and most major altcoins look like they're on the brink of completely breaking down with most other altcoins grinding to new bare market lows when crypto is supposed to be in a bull market obviously there have been exceptions like XRP but it's clear that
• 03:00 - 03:30 there's been next to no altcoin rotation so far and this is where things get interesting because the narrative for why there has been no altcoin rotation has changed quite a bit over the last year first it was because only Bitcoin had spot ETFs meaning that most inflows would go into BTC after the spot Ethereum ETFs were approved in mid 2024 though it became clear that the market structure wasn't the issue because there still wasn't any capital rotating into ETH then the narrative for why altcoins
• 03:30 - 04:00 underperformed was because there were too many altcoins specifically memecoins and if you watched our video about crypto dilution though you'll know this is a myth while it's true that there are tens of millions more altcoins compared to just a handful in 2021 most have zero economic value the number of altcoins with economic value has only grown by about 40% since 2021 and this goes handinhand with another narrative used to explain why altcoins had
• 04:00 - 04:30 underperformed and that's that all the retail investors are already here and if you watched our recent video about retail investors though you'll know this too is a myth although it's true that there are millions of crypto investors already the number of crypto investors are still only 20 to 30% of the level of stock investors these facts suggest there must be another reason why altcoins have been underperforming there must be another reason why this cycle feels different believe it or not but
• 04:30 - 05:00 one of the biggest contributors to this phenomenon could actually be existing crypto investors but before we get into that be sure to smash that like button if you enjoying this video and don't forget to subscribe and ping the notification bell to make absolutely sure you don't miss our upcoming videos now to quickly recap the main reason why this market cycle feels so different is because there's been no rotation from Bitcoin into altcoins so far historically there should have been much
• 05:00 - 05:30 more rotation into altcoins by this stage in the cycle the fact that altcoins have continued to grind lower instead is ultimately why everyone feels like the cycle is different and everyone is looking for reasons why well here's a reason nobody is talking about most people who invested in crypto over the last year are familiar with the 4-year cycle they know that prices tend to rise after the Bitcoin hovering they know that rallies get bigger and bigger in the 18 months after the h havinging they
• 05:30 - 06:00 know that altcoins will see bigger gains than BTC because most new investors that come will be retail who buy alts so here's a question for you if you've bought crypto over the last 12 to 18 months why did you do it what was the catalyst that incentivized you to start investing in crypto chances are that the answer is related to the spot bitcoin ETFs either Black Rockck filing for a spot ETF over the summer of 2023 the prospects of the ETF approval rising in
• 06:00 - 06:30 late 2023 or the ETF listing and resulting rally in early 2024 if you answered yes here's another question for you which cryptos did you buy because of these catalysts did you buy Bitcoin or did you buy altcoins instead because Bitcoin had already rallied a lot and you knew that altcoins would eventually follow suit chances are that you probably bought altcoins because you most likely knew that altcoins would yield higher returns than BTC if you
• 06:30 - 07:00 answered no the chances are you're in the minority because the charts suggest that most crypto investors did exactly that most invested heavily into blue chip altcoins in early 2024 presumably because they knew that altcoins would pump more than BTC and that new retail investors would eventually arrive to buy their bags there's just one problem they were way too early to the party to refresh your memory altcoins have historically seen their biggest gains towards the end of the bull market phase
• 07:00 - 07:30 of the cycle which you'll recall has historically peaked around 18 months after the Bitcoin hovering you'll also remember that altcoins historically rose leading up to this blowoff top phase and that the opposite has happened so far news flash that's because most early buyers came in early 2024 you see the reason why altcoins historically rose leading up to the blowoff top phase of the bull market was because in previous cycles there still weren't many
• 07:30 - 08:00 investors who knew about the 4-year cycle the result was that most investors would only start allocating as prices started rising and the FOMO started to kick in this time around though most early investors started allocating super early and what's fascinating is that you can see this in many of the charts of blue chip altcoins they all saw massive gains in early 2024 and then crashed over the summer notably it seems that most early investors were expecting this
• 08:00 - 08:30 crash they were comfortable with it because their expectation was that new retail investors would arrive by the end of 2024 and start buying their bags just like the end of 2020 and when Trump got elected in November 2024 it seemed guaranteed new retail investors would arrive and start buying altcoins but this didn't happen instead capital started flowing into meme coins and this is also fascinating because it could
• 08:30 - 09:00 also have very well been a consequence of crypto whales tempting all these early altcoin holders into dumping their alts and aping into the only thing moving which was memes the result is that the late 2024 rally for altcoins was smaller than the early 2024 rally and I'll reiterate that this was for three reasons first most early investors had allocated the most in early 2024 meaning they didn't have as much to allocate in late 2024 were it not for
• 09:00 - 09:30 the spot Bitcoin ETFs these early investors would have been the ones buying in late 2024 because of the Trump election second some early investors started selling their altcoins either to buy memecoins or because the rally wasn't as big as they expected and they were terrified at the prospect of holding altcoins at a loss for another 2 to 3 years and third new retail investors did not arrive in size which caught early investors by surprise but it's not surprising in retrospect new
• 09:30 - 10:00 retail investors don't typically arrive until the end oh sorry i just had to take a break from that video to check the Coin Bureau deals page you know the one place you'll go to get exchange signup bonuses of up to $100,000 and trading fee discounts of up to 70% or how about discounts on hardware wallets as well as exclusive altcoin alpha in the Coin Bureau Club well more information in the description now back to the
• 10:00 - 10:30 video from our perspective the reason why so many early investors expected retail investors to arrive in the end of 2024 was because that's what happened at the end of 2020 but there's another peculiar detail there too even though many believe that the pandemic stimulus checks is why the crypto market behaved the way it did in the previous cycle this doesn't seem to be the case as not much stimulus actually went into crypto what the pandemic did however was lock
• 10:30 - 11:00 people in their homes and leave them with nothing to do in other words it gave them more time to do other things like read up about crypto and stocks as such it wasn't the extra money printing that caused so much retail interest in crypto per se it's the fact that they had the time to pay attention to crypto and the result was also something historically abnormal if you look at the 2017 cycle you'll notice that there was a gradual runup in altcoin prices with a
• 11:00 - 11:30 2 to threemonth parabolic phase that started in late 2017 and ended with a blowoff top in early 2018 this is arguably what a normal cycle is supposed to look like and that's because it's the most similar to what you see in most other asset cycles per the famous Wall Street cheat sheet as you can see right over here but if you look at the 2021 cycle you'll notice that it looks very different uh there was a big first leg higher in late 2020 and early 2021
• 11:30 - 12:00 followed by a big crash and then a second big leg higher in late 2021 in our view this big first leg higher could have been because new retail investors started arriving earlier than the 2017 cycle just because they had more time to pay attention to crypto during the pandemic it's a similar story this time around with early investors arriving much earlier than in previous cycles because they're more familiar with the 4-year cycle as for those new retail
• 12:00 - 12:30 investors well uh history suggests they won't arrive until that 2 to 3 month parabolic phase sometime over the summer of this year but all the early investors assume they would arrive in late 2024 just because that's when they arrived in the last cycle put simply this cycle feels different because early investors arrived earlier than usual because they were familiar with the 4-year cycle and expected new retail investors to arrive
• 12:30 - 13:00 earlier than usual because that's what happened in the 2021 cycle the result is that these early investors have been gradually selling out of the altcoins they mostly bought in early 2024 creating the disconnect that we see with Bitcoin and altcoins put differently the reason why altcoins have been crashing so much against BTC is because early investors have been slowly selling out of altcoins they bought in early 2024 as far as we can tell most early investors are truly terrified at the crypto
• 13:00 - 13:30 markets entering another 2 to threeyear bare market particularly since many of these early investors are still holding on to their altcoin bags from the 2021 cycle and as always the narrative has followed the price action i'll remind you what some of these narratives were spot Bitcoin ETFs preventing rotation then altcoin dilution resulting in smaller gains and then all the retail investors already been here and been out of money though there is some truth to each of these neither of these narratives has really stuck and that's
• 13:30 - 14:00 because they're not really very big factors even the macro narratives haven't really stood up to scrutiny now many have argued that high interest rates and QT means that altcoins can't rally but that's exactly what happened in 2017 the Fed was actually raising interest rates that entire year and was also doing QT albeit to a lower degree to be clear there's no denying that bearish macro catalysts like tariff
• 14:00 - 14:30 threats have hurt crypto prices in the short term but who are the ones panic selling altcoins because of tariffs it's not new retail investors because most of them still haven't arrived it's not institutions because most of them still can't invest in altcoins in size and this suggests that the panic sellers are early investors from 2024 and experienced crypto retail from 2021 so this begs the question of what comes next and this is where things get truly fascinating let's imagine for a second
• 14:30 - 15:00 that this cycle was going exactly the way that existing investors expected new retail investors started arriving in late 2024 most altcoins hit new all-time highs and started correcting before another big move higher what would come next in theory it would be another big move higher in reality however it probably would have gone a bit differently if we're correct about the fact that most existing investors are experienced crypto retail from the 2021
• 15:00 - 15:30 cycle and those who invested in altcoins in early 2024 then chances are that most of them would have been itching to sell as soon as the new buyers came in believe it or not but this could have seriously limited this cycle's altcoin season and this might sound a bit funny but I'll repeat that this is hypothetical if the crypto cycle had progressed as most investors expected they all would have started selling altcoins in late 2024 as new retail investors arrived to buy their bags the
• 15:30 - 16:00 practical effect of this would have been altcoins pumping less than in previous cycles because there would have been lots of sell pressure from existing holders what actually happened was that experienced crypto retail from the 2021 cycle and those who invested into altcoins in early 2024 expected new retail investors to arrive in late 2024 but they didn't not even with Trump getting elected not even with Gary Gensler gone not even with the muted strategic Bitcoin reserve on paper it
• 16:00 - 16:30 was the perfect setup but in practice it wasn't enough for new retail to show up the outcome has been an unprecedented amount of capitulation from current crypto investors and this capitulation has happened mostly in altcoins hence why they have decoupled so much from Bitcoin and this might sound crazy but this is actually the perfect setup for altcoin gains most of the sellers have already sold and this not only means less selling pressure but also more
• 16:30 - 17:00 potential buying pressure let's play a complete thought experiment and assume a scenario where altcoins start rallying hard sometime over the summer by this point most existing crypto investors would have completely capitulated meaning they only hold BTC or no crypto at all at first they probably wouldn't think much of it maybe it's just a dead cat bounce before the bare market really kicks in just like the analysts have been saying after all this cycle is
• 17:00 - 17:30 different right well yes and no history doesn't repeat but it does rhyme every crypto cycle has been slightly different but in this context all everyone is wondering about is the altcoin season which requires lots of new investors to arrive the fact of the matter is that it's still too soon to say that this won't occur again cycle tops historically occurred around 18 months after the hing and we're not even 12 months in so again let's go back to that
• 17:30 - 18:00 thought experiment and consider a scenario where altcoins start rallying hard sometime over the summer at first existing crypto investors wouldn't think much of it and would assume it's another sell the news event but now consider that all of those bullish crypto catalysts promised from the Trump administration start coming to fruition like the spot altcoin ETFs all of a sudden there's a new surge of investors not just retail but also institutions because the spot altcoin ETFs mean that
• 18:00 - 18:30 they can allocate to altcoins too what do you think all of the existing crypto investors who capitulated would do if this happened perhaps we're mistaken but we're pretty sure they would buy they would buy every single altcoin they sold and then some this would cause prices to pump even more bringing in even more new investors and tempting even more investors who sold out to buy back in all within the same 2 to 3 month period all of a sudden the script is flipped and it feels like crypto is going to go
• 18:30 - 19:00 up only when of course it can't and that ladies and gentlemen is exactly how a blowoff top in crypto will occur make no mistake nobody knows for sure when it will happen and there's absolutely no guarantee that it will but historical cycles suggest it may it goes without saying that the altcoins with the closest ties to the Trump administration are likely to see the biggest gains as it so happens we have a video about that right over here that's all for today's
• 19:00 - 19:30 video guys don't forget if you're not subscribed you can do that right over here that's me for now i'll see you next time