Mountains and Valleys

We had a chat with Rational Active Allocation and the Iconomi team.

Learn more about how we navigate the crypto markets and why we are excited for crypto's future.

🎥 https://youtu.be/0XPZL_Xbb6Q 🎥

Crypto prices are maintaining a bullish trend in the face of a banking crisis, a concerted effort by the US government to shut down crypto on- and offramps, and a slew of concerning macro signals world wide. We're not here to cheer for other people's misfortune, but can't help notice that for once, crypto is fullfilling its initial design goal: to be a safe haven in times of financial turmoil and erratic government behavior. 🏴‍☠️

Maybe, this bullish phase isn't the start of the "big one" yet. The bear market is still young compared to past bears. We keep a conservative exposure mainly to $BTC and $ETH, but might punt a few alts later if the trend continues to be strong.

There's a big event upcoming for Ethereum. The Shapella network upgrade expected April 12th will enable withdrawals from the proof of stake layer. While we expect some turbulences and occasional bouts of FUD, Shapella marks another important step towards the completion of Ethereum's switch to proof of stake. With lots of growth on Ethereum's base layer and in scaling solutions like Arbitrum, and with the new deflationary mechanisms built into the proof of stake protocol, Ethereum is well positioned for the next expansion.

By now, the majority of serious and not so serious indicators that map crypto's eerily regular cyclical behavior have entered zones that represented good long term buy opportunities in the past: RHODL, MVRVZ, Reserve Risk, Halvening Progress, the Bitcoin Rainbow Chart, Hash Ribbons, Puell Multiple etc. etc. At the same time, the market started showing glimmers of hope over the past two months.

While low and mid time frame deviations can sometimes make the most battle hardened crypto investor question his faith, the high time frame has never failed us so far.

No matter if the bulls make a quick return or if the bears keep hanging around a little longer, this is the best time to be excited about the future of crypto.

Regular rebalance to take profit on our $FXS position. Too early to celebrate the return of the bulls, but it's been a while since we've seen so much green.

Does this crypto bear feel different from previous bear markets? Was the FTX collapse in 2022 a more brutal experience for crypto people than the collapse of Mt. Gox in 2014? From a purely crypto perspective: not really! Past bears were just as savage and desperate as this one.

The dimensions did change indeed. Sam Bankman-Fried's fraud isn't just a funny aside in the annals of global finance. It's up there with Enron's and Maddoff's deeds. With the dimensions changed the enemies: bankers, regulators and monetary guardians the world over are now after crypto, the bad, and unfortunately also the good of crypto. Feels scary.

The context changed too, with a global recession looming (crypto's first!), and people as influential as the pope's doomposting in the news every day, the world now looks even scarier than it looked when the pandemic broke out back in 2020.

Shifted dimension and context lead to people asking: is this time truly different? Is this the end of crypto? Well, so far, there is nothing pointing in that direction. It's the same thing as in 2014 or 2018, with a different flavor. Unless that fundamentally changes, we will assume continuation: cycles will keep cycling, people, and the public opinion will shift from euphoria to doom and gloom and back again. One year we all die, and the next we stand on the verge of a new golden age. The pope probably reads the charts too.

The diehard survivors of this crazy market come up with the worst, but sometimes also with the healthiest recommendations: Touch grass (or snow), and if you can't get yourself to step away from the screen, take this quiet time to learn about the crazy innovations and inspiring characters that crypto still offers once we look beyond greed and the fraudsters.

In that sense: Happy holidays from MAV! See you in a hopefully more pleasant 2023.