Is the crypto winter over?

[NoahA]

Excellent charts by CTO Larsson. I'll be very happy with $300k top for this cycle (next 2 years), even $200k is not bad

I'm most worried about timing it right. I mean it could be anywhere from 100k-500k, and that is a huge range. Of course scaling out is one option, but then you're stuck with fiat not doing anything for you. And I also happen to think that there might be some surprised in how these cycles move going forward. If we are to believe that hyperbitoinization will happen to some degree, then it should follow that the crashes should be less severe, and nobody can say if it can happen on this cycle or not.

Plus, if we assume the last cycle had a shit of liquidity injected in the form of free money from printing, and also had a shit ton of bad news in the form of exchanges and yield providers that rugged everyone, neither of these will repeat in the same way. I don't imagine governments being stupid enough to actually give out free money. They will of course stimulate, but it won't be as effective as literally giving everyone free money. The type of stimulation they will do will mostly go to rich people, and they may not be buying crypto, unlike the common folk did. And if most coins are in cold storage or in ETFs or owned by corporations, perhaps the selling will also be limited. Last cycle we had lots of forced selling that might not materialize this time around.

Anyway, I don't know anything special, but I don't think being on autopilot with this cycle theory will work as well going forward.

 

[johnarb]

I'm most worried about timing it right. I mean it could be anywhere from 100k-500k, and that is a huge range. Of course scaling out is one option, but then you're stuck with fiat not doing anything for you. And I also happen to think that there might be some surprised in how these cycles move going forward. If we are to believe that hyperbitoinization will happen to some degree, then it should follow that the crashes should be less severe, and nobody can say if it can happen on this cycle or not.

You hit on some major points and I get dizzy excited thinking of all the possibilities the next 2 years, lol

I should not have regrets of what happened in the last cycle and there was no way to see the future even if we had some ideas of previous bear markets... idk, still can't help the woulda coulda shoulda

I cashed out over 20 btc's to fiat, paid the taxes, paid everything off, no debts, survived the bear market with no job for 3 years and yet... I feel like dayum, what if I sold everything and bought the bear market not exact bottom, but even the $20k level, or what if did some defi loans and against a perp futures short positions (more on this later), idk, I think there was definitely some optimal hedging strategies that I could have done

------

Ok, so just thinking out loud and none of this is financial advise, but...

All numbers are for easy math, adjust per your needs and also, I underlined holding fiat concerns, which helped me to live off of for over 3 years, but for this cycle, idk man, that's way too much fiat if we hit the high numbers we're talking about

Let's say $200k, we feel uncomfortable it might be peak cycle top or it might continue to go up to $1M peak cycle top we just don't know...

Scenario 1: (conservative risk)

Borrow against 10 bitcoins 70% ltv on a defi platform, get 1.4M USDT(/C) and do not plan to pay margin call at 80%, can get liquidated and incur penalty fees... but if this is the start of the bear market, there's enough fiat to buy the bottom at $40k-60k prices

Scenario:

Same as above but with the addition of perpetual futures short position, say 400k usdt leverage 2.5x (short 1M worth or 5 btc),

if btc goes higher to $280k, perp futures liquidated, but everything worth more (10 btc collateral worth 2.8M now) and re-consider all calculations

Fiat on hand is 1M Usdt (1.4M - 400k put into perp futures), with a defi loan of 1.4M, collateral worth 2.8M

If btc goes down to $160k, defi loan is liquidated, never had a defi loan liquidated but minus fees, maybe $50k back net, plus 1M Usdt, plus a perp futures position m2m in profits of 200k + 400k Usdt collateral for dex perp futures, can ride this perp futures short all the way to bear market low or close at any time, no one knows the future

My math could be off here and there, but I guess my point is if we think $200k is top, which we never know the top until much later, initiating a couple of defensive strategies to go into the bear market, with the ability to still be on the ride to much higher bull market cycle top $1M, why not

 

[long]

Know of a chart that shows the percentage of BTC in cold storage over time?

 

[johnarb]

Know of a chart that shows the percentage of BTC in cold storage over time?

There';s no way to tell if bitcoin is stored on a cold-storage device and even if it is, the private keys can be exported and imported to a regular wallet. I think what you meant to say is bitcoins that have not moved (i.e. transferred to a different address) over a given time

It varies based on market cycle, bull vs bear market, but I've seen free charts on Twitter measured against a given variable (i.e. price, time)

There are paid services or you can also do it on your own, run a full node, write some extensive code against your local copy of the blockchain, or hire a blockchain dev, or maybe some kind of AI, but so far what you're looking for is simple and doesn't require much, i.e. known identity info for the bitcoin addresses, such as Satoshi coins, Exchanges, North Korean hackers, retail (based on behavior analytics), etc

useful info, over 70% of all bitcoins in circulation have not moved in over a year, 85% have not moved in over 3 months

 

[2rosy]

You hit on some major points and I get dizzy excited thinking of all the possibilities the next 2 years, lol

I should not have regrets of what happened in the last cycle and there was no way to see the future even if we had some ideas of previous bear markets... idk, still can't help the woulda coulda shoulda

I cashed out over 20 btc's to fiat, paid the taxes, paid everything off, no debts, survived the bear market with no job for 3 years and yet... I feel like dayum, what if I sold everything and bought the bear market not exact bottom, but even the $20k level, or what if did some defi loans and against a perp futures short positions (more on this later), idk, I think there was definitely some optimal hedging strategies that I could have done

------

Ok, so just thinking out loud and none of this is financial advise, but...

All numbers are for easy math, adjust per your needs and also, I underlined holding fiat concerns, which helped me to live off of for over 3 years, but for this cycle, idk man, that's way too much fiat if we hit the high numbers we're talking about

Let's say $200k, we feel uncomfortable it might be peak cycle top or it might continue to go up to $1M peak cycle top we just don't know...

Scenario 1: (conservative risk)

Borrow against 10 bitcoins 70% ltv on a defi platform, get 1.4M USDT(/C) and do not plan to pay margin call at 80%, can get liquidated and incur penalty fees... but if this is the start of the bear market, there's enough fiat to buy the bottom at $40k-60k prices

Scenario:

Same as above but with the addition of perpetual futures short position, say 400k usdt leverage 2.5x (short 1M worth or 5 btc),

if btc goes higher to $280k, perp futures liquidated, but everything worth more (10 btc collateral worth 2.8M now) and re-consider all calculations

Fiat on hand is 1M Usdt (1.4M - 400k put into perp futures), with a defi loan of 1.4M, collateral worth 2.8M

If btc goes down to $160k, defi loan is liquidated, never had a defi loan liquidated but minus fees, maybe $50k back net, plus 1M Usdt, plus a perp futures position m2m in profits of 200k + 400k Usdt collateral for dex perp futures, can ride this perp futures short all the way to bear market low or close at any time, no one knows the future

My math could be off here and there, but I guess my point is if we think $200k is top, which we never know the top until much later, initiating a couple of defensive strategies to go into the bear market, with the ability to still be on the ride to much higher bull market cycle top $1M, why not

when you sell to the ET crypto haters you know you're at a top

 

[long]

There';s no way to tell if bitcoin is stored on a cold-storage device and even if it is, the private keys can be exported and imported to a regular wallet. I think what you meant to say is bitcoins that have not moved (i.e. transferred to a different address) over a given time

It varies based on market cycle, bull vs bear market, but I've seen free charts on Twitter measured against a given variable (i.e. price, time)

There are paid services or you can also do it on your own, run a full node, write some extensive code against your local copy of the blockchain, or hire a blockchain dev, or maybe some kind of AI, but so far what you're looking for is simple and doesn't require much, i.e. known identity info for the bitcoin addresses, such as Satoshi coins, Exchanges, North Korean hackers, retail (based on behavior analytics), etc

useful info, over 70% of all bitcoins in circulation have not moved in over a year, 85% have not moved in over 3 months

View attachment 334497

I guess I was thinking that the amount in cold storage is less likely to move. Is the amount of BTC held on exchanges public knowledge? Could you just subtract that amount from total BTC to get an estimate of what percentage isn’t readily available to immediately sell if the owner got scared? Maybe I’m looking for an overall owner sentiment chart that shows the change over time.

 

[johnarb]

Genesis has been selling $1-1.5B worth of GBTC to payoff creditors

 

[NoahA]

I guess I was thinking that the amount in cold storage is less likely to move.

I look at it completely differently. Price is set at the margins, so the locked away coins don't really do anything. Sure, they limit supply, but that just means fewer and fewer coins are needed to move price.

I think of it like housing. A neighbourhood can have 200-500 homes, and yet, only 1 or 2 sales can drastically affect the price of every house in that neighbourhood.

So I'm not sure how predictive cold storage coins are anymore. Maybe when they talk about flows going into exchanges, this might mean they are getting ready to sell, so that could be a factor. But even what we are seeing today, 100k extra coins went into ETFs compared to what came out in GBTC, and price is still not really reacting too much. Now I do fully believe there will be a supply crunch, but the way that BTC is priced is a mystery to me.

Even the stat about how more addresses means more holders of bitcoin is bullshit. I had 50 UTXOs at one point, all in a different address, and so they would count this as 50 new people holding bitcoin. I then consolidated and eliminated 20 UTXOs... would they consider this a shrinking market? Much of this analysis is mostly circumstantial if you ask me.

 

[johnarb]

But even what we are seeing today, 100k extra coins went into ETFs compared to what came out in GBTC, and price is still not really reacting too much

GBTC outflows vs 9 ETF inflows is equal to before 1/11 and after

Depending on what price you wish to measure from, $43-45k before and $53k after 100k coins net inflows, we're looking at $8-10k price addition to bitcoin

(the recent Genesis selling muddies the discussion, we had negatve inflow 2 days ago, and possibly yesterday I have not seen the data posted on Twitter, yet)

100k coins added over 20% of market cap, means $4.5-5 B of new money added close to $190B of market cap for Bitcoin pushing it to over $1T in market cap

I would not say the price has not gone anywhere when it went to new 52 week high and crossed a major milestone $1T market cap

Do we want higher prices? of course we do, and it's coming, just have to be patient, let the 9 ETF's keep buying hundreds of millions of $ every trading day. Low time preference, touch grass and all that

British HOdl has a video on it, explaining it's in line with the market multiplier for bitcoin of 50x which is much lower than the 118x by BofA for every $1 of new money buying bitcoin

this is like a bear market multiplier, lots of scared money from 2021 happily getting out at break-even

Even the stat about how more addresses means more holders of bitcoin is bullshit. I had 50 UTXOs at one point, all in a different address, and so they would count this as 50 new people holding bitcoin. I then consolidated and eliminated 20 UTXOs... would they consider this a shrinking market? Much of this analysis is mostly circumstantial if you ask me.

The chain analysis you're describing should be available on blockchain dot com

But chain analysis that CryptoQuant, Glassnode and Chainalysis produce on their paid reports uses much more sophisticated methods of identifying real owners be it individuals or entities

To give an example, if you purchased all your bitcoins from Coinbase and withdrew 50 utxos to 50 different addresses, they will still identify it as one person/owner

I'll make a guess that Glassnode and CryptoQuant have a deal with Coinbase and other exchanges for this type of data even if stripped of PII (KYC names and addresses)

For Chainalysis, I suspect they get everything including the names of your dog and best friend

Which is why personally manage utxo's in 3 categories, non-kyc defi, non-kyc exchange, and kyc-ed coins

But the point is not to dismiss the stats that are provided out there, sure they are not perfect, but they are far from useless

 

[long]

What’s gonna happen when FTX investors get their settlements? What % will flow back into Bitcoin?