The current bear market has lasted a year and a half thus far with no end in sight, and honestly that's a bit discouraging. Of course there are no surprises here. This is pretty much what happened back in 2019 as well. Bitcoin dominance rises during uncertainty; especially regulatory uncertainty in which the SEC has already declared Bitcoin "not a security".
The last time Hive was 29 cents Bitcoin was trading at $17k, so again we can see that Bitcoin outperforms the market a bit the year after the big 4-year bear market cycle is over. Now we sit in that awkward middling era of the cycle where anything can happen.
Would be nice if crypto was more than just a risk-on asset class for gambling in the eyes of most of the world, but that's exactly what it is when we look at which demographics are throwing the most money at it. Everyone wants number to go up but if we take a look at who's making number go up we might have second thoughts. Fickle money is a bad foundation for stability. Ironically enough zealous "diamond handed" hodl money is just as bad for stability. The best money buys low and sells high, keeping the price as stable as possible over time and lowering the volatility of these assets.
Unfortunately I can't count myself among one of these people who has the discipline to DCA over time and make these kinds of adult decisions. Like most everyone else, I gamble gamble it up, and then do mental gymnastics around not capitulating when I should and calling it "diamond hands". The learning curve is steep and progress is slow, but I suppose I get there eventually. Until then. Gamble gamble. Hodl. So on and so forth.
Of course we can't eliminate the market cycle completely. Crypto will always be volatile. The real question is how does that volatility affect us? Does it have an affect on our emotions? Does it have an affect on our livelihoods? Most importantly: does it have an affect on the abundance mindsets that we are supposed to be employing?
The goal of crypto is abundance, and yet the outcome of volatility is scarcity. If we can lose +90% of our stack within a single bear market then how much money do we actually need to live in abundance? As someone living in America I can safely say that number is well over a million dollars. Of course that's only during the pico top. If we are talking about the bottom then I would be saying it was well over a hundred thousand. That's the exact same bag after a 90% drop.
In terms of volatility Bitcoin never drops 90%.
Somewhere in the 80% range seems to be the standard. Of course it's dropped even less than 80% this time around, as an 80% drop from $69k is just under $14k, which we never got to. Does this mean that Bitcoin is still the best vehicle for abundance because it has the lowest volatility and the best risk to reward ratio? That's quite possible this day in age.
Luckily it's impossible for Bitcoin to always reign supreme.
The deflationary mechanics ensure it. Deflation creates volatility, and programmable money that embraces smart-inflation and elasticity will easily find itself more stable than the big dawg. Hive is lucky in that we have a flavor of smart-inflation, but it's unfortunate that we have no elasticity and emission rates are highly static and predetermined. Although I must admit that the APR on HBD is quite elastic and malleable, even if we haven't actually used it in such a fashion as of yet. All in good time.
It's also quite possible that all that matters is time.
Bitcoin has been around the longest so it benefits from the lowest volatility and best infrastructure. Other networks haven't had time to catch up. However, what happens when Bitcoin has been around 30 years? Something like Hive will have been around 23 years at that point. We'll always be 7 years behind, but the percentage gap will continue to narrow over time. Today Bitcoin has existed for 100% longer than our small community. In another 7 years that time-gap drops to 50%. Maybe that's significant. Maybe not. It's all speculation after all.
Wen moon?
Certainly it's the question that gets asked the most while also being the question we shouldn't be asking. Every year I say that September is a bad month for the markets and we should be ready to buy the dip. However this time around who knows. We are not in a normal cycle. This is the first time crypto has experienced a legacy bear market on top of some of the most devastating systemic failures the industry has ever seen. Oh yeah and also the vultures regulators moving in to kick everyone while they are down and call it "protection" (proving once again that government and organized crime are the same thing).
They say you shouldn't trade with your emotions but this is only half correct. There's only one emotion we need to worry about: fear. Fear is the core emotion of every FOMO/FUD cycle. It is the fuel of every pump and dump. However, if we harness other emotions or the emotions of others it can sever us well when navigating the markets.
Something I learned the hard way last cycle is that when I'm feeling generous and charitable is exactly the time I need to be DCA rotating back into stability. In total I know that I gave away a least a couple thousand dollars in 2021 trying to get friends, family, and acquaintances excited about crypto. Which isn't much, but people who know me know that it's extremely out of character for someone as scrappy and low-maintenance as I am.
In conjunction with feeling charitable comes an extreme overconfidence that we also need to look out for. If we're ever feeling overconfident and unstoppable, yeah that's obviously a great time to DCA back into stability. Of course this emotion is much harder to identify, and you'd have to know yourself pretty damn well to catch it. 99% of the population doesn't know when they're being overconfident. They mistake it for regular deserved confidence. Only after we get thrown into the mud do we realize the mistake we've made. Avoiding hubris is difficult, but one of the easiest ways to not get burned if such progress can be accomplished.
As far as trading off the emotions of others, in 2021 a friend approached me and asked me about buying crypto after years of me trying to convince him to buy in. At the time I knew this was a signal that the top was in... but again I ignored the signal and continued holding everything. Luckily I did have the common sense to tell him that it probably wasn't a good idea. Of course when everything goes tits up these are the same types of people who don't even consider buying in even after prices have dropped 80% across the board. Typical FOMO/FUD market cycle.
We can count on the law of averages in this regard. The general population will always do these same things over and over and over again. An individual can learn from their mistakes and start figuring this stuff out, but on the average people as a whole will always make the same mistakes. There's a sucker born every minute, after all.
Conclusion
This market has got a lot of people down, but don't say I didn't warn you. The year of the maximalist is not disappointing and we are seeing that play out right now before our very eyes. Just because the narrative happens to be regulatory overreach doesn't mean it's random. Bitcoin very much still seems to be on a 4-year cycle of it's own making, which is honestly pretty impressive when you think about it.
Perhaps Satoshi was onto something here. Perhaps they knew that the market cycle can't be avoided, but it can be contained within boundaries of the economic systems we create. The halving event seems to dictate the market cycle in a big way and seems to have a lot more power than it actually should (especially now that cutting emissions in half is a statically insignificant number after having already been cut three times). Time will tell, as the next halving approaches.
All we can do now is simply ride it out like we always do. Yep, times are a bit rough right now and it's pretty frustrating to watch these lying know-nothing politicians flex on us, but at the same time we also knew it was inevitable. Suck it up, Buttercup.
