Not just a normal Bitcoin bear market?

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Ed48

Bitcoin only came into existence after the GFC. It has only ever experienced relatively benign market conditions, during one of the longest equity bull markets in history. All previous Bitcoin bear markets occurred in isolation, not correlated with overall market weakness. We got a taste of how Bitcoin reacts to general market sentiment when Covid hit but that was just a mini crash, and everything quickly bounced back.

This time may be different. A lot of markets are now under pressure and this doesn't look like a short downturn.

I'm actually struggling to figure out what could be a safe haven with the way things are unfolding. Apart from energy and a few other commodities, most things are only heading in one direction - down. Cash (USD) may be the only safe place to ride out this storm.

When the bad times end, which they always do, Bitcoin may rise from the ashes. But I wouldn't like to put a number on how low it could go. Previous bear market drawdowns of 80% may look tame in comparison.

Be careful out there.
 
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INVESTORs and TRADERs see things very differently.

investors are weeping and gnashing their teeth.
traders are laughing all the way to the bank.



INVESTORS' VIEW
This time may be different. A lot of markets are now under pressure and this doesn't look like a short downturn.

I'm actually struggling to figure out what could be a safe haven with the way things are unfolding. Apart from energy and a few other commodities, most things are only heading in one direction - down. Cash (USD) may be the only safe place to ride out this storm.



TRADERS' VIEW
This time may be different. A lot of markets are going down and this looks like a long downturn.

I'm actually looking for market correlations where the market moves in tandem.
Apart from energy and a few other commodities, most things are heading in a downward direction - and that is very good for trading.


Open your eyes big. Look out for trading opportunities out there.

_____________________________________________________
 
Ed48 said:
Bitcoin only came into existence after the GFC. It has only ever experienced relatively benign market conditions, during one of the longest equity bull markets in history. All previous Bitcoin bear markets occurred in isolation, not correlated with overall market weakness. We got a taste of how Bitcoin reacts to general market sentiment when Covid hit but that was just a mini crash, and everything quickly bounced back.

This time may be different. A lot of markets are now under pressure and this doesn't look like a short downturn.

I'm actually struggling to figure out what could be a safe haven with the way things are unfolding. Apart from energy and a few other commodities, most things are only heading in one direction - down. Cash (USD) may be the only safe place to ride out this storm.

When the bad times end, which they always do, Bitcoin may rise from the ashes. But I wouldn't like to put a number on how low it could go. Previous bear market drawdowns of 80% may look tame in comparison.

Be careful out there.
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I agree with your analysis. Bitcoin, etc were not inflation hedges but rather some kind of quasi-equity in a pre-revenue company. Pre-revenue company valuations were inflating over the last decade and now they are collapsing. Crypto will be no different.

Cash is the only safe spot because there will be resetting of valuations across the board. First it's pre-revenue and unprofitable companies. Then it's profitable companies at high valuations. Then its the value stocks. Then it's capitulation. And this can happen over years.
 
Cash is safe? Inflation historically is not a one year phenomenon. Normally it rises year over year in the short term. So let’s say you lost 10 percent this year, you could easily lose 10 percent next year (at the minimum)
 
Masks off time.

All the amazing bullshit that we have been hearing for years about "store of value" or "hedge against inflation" is now unveiling, like a nice silk blanket falling of the face.
 
sammybea said:
Cash is safe? Inflation historically is not a one year phenomenon. Normally it rises year over year in the short term. So let’s say you lost 10 percent this year, you could easily lose 10 percent next year (at the minimum)
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Yes but losing 20% purchasing power over 2 years is better than losing 50% or 90% in bombed out assets.

If you know something that is guaranteed to beat inflation over the next couple of years, I'm all ears.
 
Ed48 said:
Yes but losing 20% purchasing power over 2 years is better than losing 50% or 90% in bombed out assets.

If you know something that is guaranteed to beat inflation over the next couple of years, I'm all ears.
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You are right there is nothing that can guarantee to beat inflation but nearly everything is dropping down now so the only chance is to short for example NDQ or S&P500 and if this is too expansive you can short for example crypto or tech stocks.

The problem is that you have to know what you are doing. It's easy to buy and just hold but if you go for short you have to be way more careful and you have to observe you positions all the time so there is much more time needed for trading like this and time is money.
 
Ed48 said:
Yes but losing 20% purchasing power over 2 years is better than losing 50% or 90% in bombed out assets.

If you know something that is guaranteed to beat inflation over the next couple of years, I'm all ears.
More...

consume less
 
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