Let me start off by saying that I never bought into the whole bitcoin super cycle theory. It was always a little too "moon-boy"-ish for me.
The basic idea behind it was that now with institutional money coming in and countries adopting bitcoin and crypto, we would no longer see the 80%+ corrections and multi-year bear markets that have traditionally followed the 4 year bitcoin halving cycle. Blow-off tops and euphoria would only see minor corrections as we go up and to the right only.
It seems great in theory, and for anyone bullish on the space who wouldn't want that to happen? We are seeing non-stop adoption of bitcoin and web3 platforms across every major facet of life - banks, social media, celebrities, and sports franchises. It makes sense that at some point the cycle would break because bitcoin would no longer be in price discovery mode.
It was exactly that kind of thinking that I feel absolutely wrecked investors who bought the bitcoin top in early 2018 and didn't have the stomach to hold for another couple of years. It felt very euphoric to think that way, especially going into Q4 of 2021 with all of it's high expectations.
Well, as we see bitcoin drop once again, I'm actually starting to believe in the super cycle theory.
Although I do have one big caveat.
The basis of the theory resides in the idea that we will no longer see massive corrections. As I said before, that was too unreasonable for me. How am I balancing it out?
Because I wonder if we will no longer see any more blow-off top moments like we saw in 2013 and 2017 where euphoria reaches epic levels.
In this way, bitcoin loses a lot of it's cyclical volatility, while still remaining a highly volatile asset. We've seen open interest and high leverage get wiped out time and time again over the past year. For those playing whale games, it's easy money and there is no reason to think that it would stop anytime soon.
Now that doesn't mean I am not bullish on bitcoin and that it will never hit new all time highs. Quite the contrary in fact. I believe we will continue to see moves up and down as market will do what markets will do, but over time the hodlers who accumulate during consolidations will drive the supply low while demand will continue to rise as wider mainstream adoption is reached over the next few years.
I won't give any price targets or time frames because I think it's impossible, plus there are much smarter people than me using stock-to-flow and on-chain metrics that can provide those. This was more of just a public shower thought as I ponder what 2022 has in store for bitcoin and crypto.
Not financial advice.