That’s what the uneducated critics will say. What they miss is, everything looks like a scam and is scary when it’s still new.
The internet also looked like a dumpster fire full of nude videos back in 2001. Now it’s invisible. We use it the same way we breathe oxygen.
I’ve been quiet on crypto for a while since the prices crashed last year. Some people think that’s because I’ve given up on crypto.
It’s the exact opposite. When you’ve been around crypto long enough, you get good at switching off the noise and being patient with the evolution of this exponential curve in innovation.
Now crypto is starting to fire again.
No one predicted this unexplained market pump
I honestly thought crypto would be quiet for a while until at least next year or the year after.
- The global economy is sluggish and there are systemic risks that the recent failure of a few prominent banks has shown.
- Tech stocks still haven’t recovered.
- The American S&P 500 stock market index is acting like a drunk driver trying to keep the car on the road after 49 beers.
Then there’s the geopolitical situation. The fragmentation between economic superpowers and the calls for some countries to use the US dollar less.
I won’t bore you with all the details other than to say it’s not exactly boom times for the financial markets. And crypto usually follows exactly what traditional finance does.
But since the start of 2023 Bitcoin is up 82.40% and Ethereum is up 66.18%.
Traditional investments just don’t perform like that over short timeframes. Crypto does and always has. That’s why it’s like adding rocket fuel to your investment portfolio.
Why crypto prices shot right up out of nowhere
There are a few reasons…
Crypto leads the market
Crypto is a high-risk investment.
And risky investments often indicate when we’ve transitioned from a bear market back into a bull market. When money flows back into risk assets, it’s a sign of the collective psychology.
And psychology drives all financial markets.
Now money is pouring back into crypto, it’s a sign that investors are feeling more optimistic about the future again.
If crypto can perform this well under tough economic conditions and Apple’s announcement that their Q1 sales are down 40%, then the sky is the limit when the inevitable financial good times return.
Many think inflation is over
Inflation in places like the US is starting to come down.
Supply chain issues are resolved and artificial intelligence will bring on deflation (price decreases) as it helps us add enormous productivity to the global economy. Many finance experts such as Raoul Pal claim we’ll have a deflation bomb soon enough.
This matters because high inflation is what caused interest rates to go so high so fast and crash the economy. If deflation is coming hard and fast then we could see interest rates go down again.
The money printer is back online
Central banks create money out of nowhere.
This used to be a secret. Now it’s a cliche and common knowledge. How this affects you is when the central bank and the government help to flood the markets with free money that didn’t come from economic productivity, asset prices pump.
It’s what caused the 2021 financial markets to go out of control.
Now the money printer is back on, except this time they’re using fancy names that are all synonyms for “money created for free out of nowhere.”
You can visually see the change in what the US Federal Reserve has done here. Either way, good times and great classic hits are back.
If Hong Kong regulates crypto, expect a massive pump
My crypto expert friend DaxxTrader said “Crypto becoming legal in Hong Kong is crazy bullish and could be a catalyst to send Bitcoin to $48k.”
I agree. Once the crypto hubs form and the US isn’t the dominant crypto market anymore, adoption will skyrocket.
We may be weeks or even days away from this.
The trend remains your friend
The white line is crypto adoption.
The blue line is global liquid assets (cash). Crypto clearly isn’t dead at all. It’s just doing what it always does, up and to the right.
Image credit-GlobalMacroInvestor via twitter
Even more exciting is the $4.5 Trillion financial behemoth, Fidelity, launched crypto trading for their retail investors.
More investors, more demand. More demand, more inflows into crypto. More inflows, less available crypto to buy, so prices have to go high.
Papa Elon saves the day
Elon’s tweet app will soon have a digital wallet and we’ll be able to buy crypto from the app. This gives access to 500M more users, and it’s another big reason prices are pumping.
Ethereum upgrade
Ethereum is the second largest crypto. It happens to be my favorite.
Every so often it undergoes a major upgrade that makes it more valuable and adds new features. The Ethereum Shanghai upgrade just occurred. Doomsdayers said it would crash the price.
The opposite happened (as usual). The upgrade was successful and Ethereum had a small pump in price. Nice.
What you can do to profit in this next bull market
This is gonna sound odd … but take a chill pill.
Don’t get FOMO. Stay calm. Respect the long-term trend and where crypto is heading. And regularly invest whatever money you choose into proven winners like Bitcoin and Ethereum.
At the same time, have an open mind.
The most unintelligent people you’ll ever meet ride the hype waves and post “NFTs are dead” “Zuck’s Metaverse is dying” or “crypto is a scam.”
These are society’s born losers.
They refuse to accept change or understand how innovation and technology work. Their minds destroy any opportunities that could have helped them find personal freedom.
Not your problemo. You do you.
Crypto markets are pumping for many small and big factors. When they’re added together the outcome is obvious: crypto markets are pumping because the industry has value.
Decentralization, transparent asset ownership, and smart contracts that automate everything will drive our global economy forward. Layer in AI over the top and, you have the next frontier of humanity.
As we approach the next Bitcoin halving cycle in 2024, expect crypto to pump even harder, as the programmable scarcity reduces the supply available for sale. These are exciting times.
Generational wealth is being built right now. Those who pay attention and educate themselves will do well. Be one of them.
This article is for informational purposes only, it should not be considered financial, tax or legal advice. Consult a financial professional before making any major financial decisions.
