Bears to the Bulls, "Not so Fast"
Crypto runs in cycles. All of us who have been involved in this space for the last few years realize this is true. You can go back in time and watch Bitcoin make gigantic runs in the bull markets and then see devastating drops in the bear. We have now been in a crypto "winter" for almost a year and a half and the bulls are getting anxious that it's time for another run.
For the last couple months, there have been signs that its coming. Bitcoin plummeted to a low below $16k before rebounding to $25k. It has since lost it's momentum and has been trading sideways and down for a while until it sits at $22k today. The problem is, the economy right now is not in a good place. Interest rates are not just ticking up, they're leaping upwards and the Fed has shown no signs of letting up with the most recent meeting hinting at another big jump.
The other problem is that these interest rate hikes are based on lagging indicators, which means that until we see the metrics they use to make their decisions improve six months ago, they're not going to change their tune. So even if things seem like they are getting under control in the current environment, it will take six months before we know, thus the Fed could keep raising.
Furthermore, it takes 6-9 months for the changes they make today to actually impact what they're trying to achieve. In other words, things are still going to get worse before they get better. We've already seen companies cutting jobs and I would expect that is going to continue into the summer.
As much as we all want to see the bull return and watch the stacking we've done over the winter pay dividends in a big way, its still a ways away. I'm not even sure we've seen the bottom on Bitcoin yet. There are a couple people I follow out there that still think $11k is in the cards before we bottom out. With the way the economy looks, I'm not sure I don't agree.
On the plus side, this gives us more time to keep stacking at these cheaper prices. As difficult as it can be to grind away with little to no signs of rewards, history has shown that this is the way. The bull markets get all the glory, but true life-changing wealth is built during the bears. If you put $1000 into the market and three months later it's worth $20k, that is awesome. No question. But if you spend 2 years putting in $20k, then those 3 months take it to $400k. Big difference.
So, while it gets harder and harder to spend day after day grinding it out for little to no reward, every tiny fraction of a token you can acquire at these prices can be worth twentyfold during the next bull. We just need to keep our heads down and keep doing the little things every day that will keep moving us in the right direction.
I've been through a couple of these cycles now and I know how hard it is. But I also know how important it is to stay the course. There is a rainbow on the other side, but we have to get through the storm first.
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