Yesterday I had an askleo post asking you guys about whether the crypto market is entering a super cycle or not, and didn't had much interaction on this one. I guess nobody cares at this point, as there's decent money to be made from blogging, trading or gaming.
Willy Woo has recently told in an interview with Natalie Brunell that Bitcoin will gradually transit to a “drunken walk” upward from its well known four years cycle.
The schedule really is for this bull market to peter out around December onwards, and currently, the on-chain data is saying otherwise… Now that we’re approaching our fourth quarter the data looks quite different from any cycle we’ve seen before, and people keep thinking that we’ll template this bull/bear cycle to past ones and if you’d look on-chain structurally, everything looks different. I think it’s a fair chance that we’ll not go into what we think which is a traditional Bitcoin bear market, which generally is a huge retrace of maybe 80% of its value, and it also takes about nine months to a year to shake out. I don’t think that’s going to happen, and I think now judging from the maturity of this market and the impact of the different parts of the demand and supply from different parts of the ecosystem, we’re breaking out of this four-year cycle which is really contingent on the network being programed to halve.”
-Willy Woo, source
I bet there are plenty of technical analysts and traders out there that would disagree on this one and the narrative is that during almost every last stage of the bull market such theories have been around. Somehow investors are expecting, during every cycle, for the uptrend to never end. Who wouldn't love an era of abundance, but what chances do we have for a supercycle?
I'd say quite high and the narrative supporting such a super cycle is the supply shock in Bitcoin. The miners are currently getting 6.25 BTC per mined block and that amount will slash in half less than three years from now. Demand is relatively high though, compared with the 2017-2021 time frame.
We have countries such as El Salvador and Cuba adopting Bitcoin where Bitcoin is not particularly a speculative asset, but a currency that replaces remittances used to send money into those countries. There are financial institutions such as MicroStrategy who eat up a lot of the Bitcoin's supply, loads that will probably never hit the market and with every tiny bit of absorbed Bitcoin off the market the supply gets shrunk.
Who's there to sell when prices go wild though?
Oh... there will be plenty, but as Willy said, that doesn't mean we should definitely have an over 80% correction. The space has evolved a lot and there's basically much more to earn, if the market doesn't enter a true bear market, by hodling(staking), farming, gaming and whatever means one has to put that crypto to work. Gradually crypto participants will make use of crypto in many other ways than the simple trading ways we had. Putting it to work is what that financial freedom is all about.
Patterns often times fail...
The industry seems to be in a never ending expanding bubble and it's supposed to be that way. Blockchain technology is like the internet and all sort of projects making use of it are the apps of the future. Only a fool would have sold Apple stocks in 2010 and we're probably embracing the same mentality towards crypto at this stage.
Nobody knows for sure how all of this will unfold and whether "the four year cycle is dead", but what Willy's saying makes a lot of sense. I have to admit that I first rejected this theory about a year ago when I talked about it with an acquittance from my hometown, but the industry is able to revamp in quite a short time and make the impossible possible.
The world of the internet is expanding at exponential rates and that's mostly due to the marvelous tech that blockchain is. Humanity is definitely in the middle of a shift on so many levels and crypto is the brighter side of that shift. I'm expecting tons of goodies from it, regulations being what annoys me the most though. This thing wasn't supposed to be regulated, but so many were asking for it and got compliant(looking at you Binance)...
Maybe this time "the pause and breathe stage" won't take that long anymore. Crypto has definitely developed bigger lungs.
Thanks for attention,
Adrian