The Bear Market is a long way from over. I’m talking, years long, not day or weeks.
I’m in a Facebook group called ‘Terra Luna Classic LUNC’ and with all due respect to a lot of people in that group, some are seriously deluded. One member asks, “will LUNC hit $1 this year or next?”. For LUNC to hit $1 it is going to have to:
- Dethrone Bitcoin and become 17 times more valuable
- Become more valuable than ALL cryptocurrencies combined, 7 TIMES over and
- Go head-to-head with the market cap of GOLD, only narrowly missing out.
Honestly. There are 6 and a half TRILLION LUNC in circulation. I shouldn’t have to explain this to these guys, but someone really should. Actually, hold on a sec…
Ok, I’m back.
We need to get real for a second, folks. Let’s put some things in perspective:
Inflation
It’s high. Like, really high. Way higher than people want it to be. When inflation is high, guess what people aren’t investing in… Yes, cryptocurrency. Not just cryptocurrency though. NASDAQ, S&P, Tesla, Stocks in general. You know what they’re ARE buying? Food. And gas. Unfortunately for us hodlers, we need investors to eat before they can start speculating on Shiba Inu.
Interest Rates
The pair go hand in hand. Guess what people value just as much as food? Their house. Gotta keeps up those mortgage repayments, and yep, they just went up. Food and shelter, or ETH anyone? Man I love stacking sats, but not as much as I value a warm bed under a ceiling propped up by walls.
Institutional Investors
I’ve been spending the last few weeks learning Technical Analysis to assist my trading, and I’ve met some interesting people and I’ve learned some remarkably interesting things, such as: crypto is now highly correlated with the stock market. The big boys are now playing the game, and they want YOUR money. Institutional investors can make big market movements, wiping out the stop losses and liquidation points of retail investors for their own gains.
There is an inverse relationship with the US dollar and US 10 Year Treasury Bonds, and “risky” assets such as tech stocks and crypto. Meaning, when the USD and the 10 year bonds are on a run, it means that institutional investors are moving their money from speculative assets to assets that basically guarantee a return.
Don’t quote me on the figures, but one investor advised me that the amount of money currently invested in US 10 Year Treasury Bonds is around $100 TRILLION.
The current market cap of ALL crypto is currently less than $1 Trillion.
So let’s be real. Until stability returns to the global markets, there isn’t going to be a huge influx of money coming into the cryptocurrency space for two very simple reasons:
- Retail investors (you and me), don’t have a spare Trillion dollars to take Crypto back to all-time highs.
- Because you and I don’t have money to stake, institutional investors will also be staying away, because they invest to make money, OUR money, and they aren’t going to do it before we have spare money to invest.
Unfortunately, things are going to get worse before they get better. There are global narratives at play which impact the price of our favorite cryptocurrencies. These include things like:
War in Ukraine
UK politics
Fed rate hikes
Inflation
And more.
My non-financial advice is this:
Dollar cost average SMALL amounts, if you MUST. Or,
SAVE your money for more important things in the short to medium term, like a weekend away.
If you do have crypto and are in a severe loss, HODL if you can, but expect a 2 year wait until you can smile again. Hell, you may even want to go on a crypto sabbatical and not check the prices for six months to a year.
Go and speak to someone without being distracted, crypto will still be here when you get back.
About Me
I’m Jamie, 35 years old and living in Australia. I got into cryptocurrency in 2018 shortly before the $20k high and subsequent bear market, and when you could buy 1 ETH for $300 (my first investment). Since then I have dabbled in most things crypto-related: leverage trading, minting and selling NFT’s, ICO’s… I’ve been scammed (several times), attempted various trading strategies (from hodling to 100x’ing a trade) and introduced many people to crypto.