A couple weeks ago, I wrote a post detailing how things are beginning to turn sour for equities. In that post, I did give a small glimpse on how I felt about crypto towards the end. In this post, I’d like to share more thoughts on that particular point I raised.
Strap In
Here’s an excerpt from my previous post I was mentioning.
I’ll cut to the chase and make a bold prediction for the short-term. The next few weeks will be the wildest ride we’ve ever witnessed across asset classes and crypto. I know of quite a few people who have exited everything recently. However, the markets always work in strange ways. Not even the smartest of your peers are immune to it.
I think I should have expanded more on this and have given it some thought in recent weeks. For asset classes outside of crypto such as equities, things are looking pretty bleak. Crypto on the other hand, reminds me so much of late 2017 currently.
Let’s take a look at a few charts and I’ll share my rationale as well.
The above chart looks quite similar to what we’re seeing today. September is a historically red month for crypto across the board.
We can clearly see a few similarities here. I’m no TA wizard or anything of the similar but these markets drive a lot off sentiment and whale activity. If a certain few large holders want a certain direction (up or down) to happen, they’ll create it and directly influence sentiment with that move.
The main thing that stands out from the previous cycle is the focus on utility, specifically those expensive JPEG’s you keep seeing fetching obscene prices. The previous bull run peaked on the massive number of initial coin offerings (ICO’s) taking place on Ethereum. This new funding mechanism at the time drew in hordes of retail investors looking to capitalize.
Reflecting back, it does sound pretty crazy a bunch of people online were raising $20-50M every other day for some solution to whatever. Most of it was pure scams and many people got rinsed in the process. Less than 10% of these “promising projects” are around today.
Remember Substratum?
Is this time any different?
Not really. But, we’re beginning to see a slow evolution towards increased utility with the main driving factor of this market at the moment, Non-Fungible tokens (NFTs). NFTs are absolutely taking the markets by a fierce storm. They’re all over the news, celebrities are jumping in and twelve year olds are making $400k off Minecraft and whale JPEG’s.
Sounds a whole hell of a lot like 2017/2018, huh?
It’s because it’s the same thing all over again, just with a different market driver.
Things are about to get interesting in the next few months.