Stop Thinking You’ve Missed the Crypto Opportunity: We’re Still in the National Anthems.
Even if you were 200 years late to buy property in New York, you would have still made money.
We’re early.
It’s not just a nice sentiment, either.
Whenever I saw Crypto make a parabolic price rise, I’d think, “I’ve missed it. I missed the golden opportunity.”
In 2017, it spoke to my lack of understanding of how exponential prices can rise and B: how short-term my time horizon was while I fixated on daily price charts.
As a new wave of people enter Crypto, they repeat the same errors as the cohort before them until the market becomes more efficient, and over time, the cat climbs out of the bag.
It’s like an old buddy used to say, “Jay, making mistakes is a good thing. If you repeat them, you’re a bloody idiot.”
My aha moment with all this was understanding that liquidity drives everything.
If Crypto anticipates a period of quantitative tightening, prices will tank. If signs on the horizon indicate that stimulus is set to pour in regardless of a recession—crypto bros in their mom’s basement will start buying.
We’ve all come through the eye of the storm and are now firmly in crypto summer.
According to the Fed, interest rates are poised to come down, and inflation is getting crushed, although I must say, on my weekly shop, it doesn’t feel like it.
It’s an election year, so politicians will shower voters with stimulus like Halloween candy, and the US is due to refinance their national debt.
If that wasn’t enough to tip you over the edge, Bitcoin is on the brink of a halving event, which will cut the supply of BTC rewarded to miners in half.
It’s gonna be magical.
Fix your time horizon.
I laugh when Dave Ramsay, who is hugely successful in his own right, says, “The entire concept of Crypto is mist and smoke and mirrors. I wouldn’t wish a Bitcoin investment on somebody I really dislike.”
It’s a shame such a well-respected money guru has a closed mind toward an asset class that is the most obvious asymmetric bet in our lifetimes.
Or, as Raoul Pal says, “It’s a f**king alien”.
The Crypto opportunity is unlike anything we’ve ever seen. Bitcoin has its 21 million fixed issuance that can never be changed, and everyone, not just silver spoon Silicon Valley trust fund babies, can participate in owning a share of the network.
If you had at least a four-year time horizon between each Bitcoin halving event and decided to hold the top three assets — Bitcoin, Ethereum, or Solana — you’d have increased your holding by a multiplier of 10 each new cycle.
Without doing a single thing. Just own the top 3 assets and do nothing.
How hard can that be?
The negatives I’m hearing primarily from no-coiners have gone from “You were lucky with crypto” to “I’ve missed the boat”.
Both statements couldn’t be further from the truth.
I know because I felt lucky and late when I bought Ethereum at $80, then $250, $1,000, and now $3,400. But you can see from the price chart above that it always retracts but then has a higher leg up each new cycle.
The point of difference in all of this is how long you can set your time horizon. The longer, the better.
A long-term perspective means you’re not focused on short-term price changes.
Michael Saylor, the prodigal son of Bitcoin, and his company, Micro Strategy, which owns 214,246 Bitcoins (over 1% of the entire supply), use a clever analogy to put “time horizon” into context.
He compares BTC to investing in New York property 200+ years ago.
Michael Saylor — Source
“You know, by about 1776, New York was North America’s greatest city. And you would have been late to the party, but the question is, would you buy a city block in New York in 1776?
Or if you waited until 1876 and were really late to the party, and New York was the greatest city in North America, was it too late to buy a city block in New York City in 1876?
Or how about 1976, if you were 200 years late to New York City?
If you look at the property values of New York in 1976, you’ll find that you would be rich if you had bought real estate in New York in 1976.
So, the answer to the issue is that in every economic system and empire, there’s always one city, Network, and place to which people gravitate.”
The Bitcoin ETF is the starting gun.
Mark Yusko, a world-renowned investor I often write about, invested a portion of his firm’s portfolio (Morgan Creek Capital) in Bitcoin in 2014, which went against popular opinion during a time when investors thought it was a pet rock.
Heck, people still do.
The billionaire asset manager advocates for a long-term time horizon but has said that parabolic price rises will most likely occur between “June 2024 and last until June 2025.”
He predicted a significant increase (by a factor of 10) in the market cap for assets like “Bitcoin, Ethereum, and Solana”, which is consistent with previous cycles.
The shot in the arm is thanks to the ETF inflow.
Yusko says that within the next two years, at least $300 billion will flow into Bitcoin through the ETFs.
He arrives at this figure by saying that at least 1% of the $3 trillion wealth managers manage would be diverted into Bitcoin ETFs.
Others believe he’s undershot his outlook based on the current rate of investing.
Grant Engelbart, VP and investment strategist at Carson Group says investors are putting around 3.5% in Bitcoin ETFs. Carson Group was one of the first advisor platforms to onboard Bitcoin ETFs.
Yusko says it doesn’t make sense that people would have zero Crypto with all of these inflows, considering that it’s also been “The best-performing asset in 12 out of 15 years.”
Mark Yusko — Source
“The game’s barely started. I mean, we are at just the knee of the curve. So, if you think about an S curve, you get ten years for the early adopters, ten for the middle 80%, and then 10 for maturity. We’re just entering that second decade. The first four years of science experiments don’t really count. The next ten years, real. This year, real, but we’re not even a year into the upward slope of the S curve. And so, to say you missed it, not even close.”
Final Thoughts.
There will come a cycle where the opportunity to make a significant upside in Crypto is gone.
Or, as Cryptocurrency genius Ivan Liljeqvist says, “Crazy upside is only possible in markets that are very new, inefficient, and still not fully discovered.”
Staying concentrated on performing assets is a strong strategy.
My most significant mistake in previous cycles was chasing 30 x pumps in Altcoins with minimal network effects or established development.
Diversifying in a space where all assets rise optically does not help.
Instead, I found it more beneficial to make larger concentrated bets on established Crypto assets and then extend my time horizon with a ‘set-it-and-forget-it’ mindset.
Play the long game and avoid zig-zagging in and out of narratives.
It’s a heck of a lot more fun.
Nice piece Jayden.