It’s typical. The four-year cycle is taking place just like any other cycle, but the significance of this cycle is comparable to the 1930’s of Gold or the Dot.com bust in 2000.
The impact of $BTC will be massive over the following decades.
The likelihood of a potential crash isn’t going to happen either; I think the markets are preparing for the biggest bull ever—the final bull before the big crisis happens.
It’s written in the stars, and the past days have shown that the U.S. economy is getting weaker week after week due to a failing economy and FED policy. The U.S. debt has broken through $35 trillion, which has gone vertical over the past few years.
The interest rates have been rising due to the high level of inflation. However, it’s a neverending doom cycle where the amount of QE is causing inflation to skyrocket, through which a temporary increase in interest rates resets the economy for a moment, after which inflation picks up again. Still, more importantly, more borrowing is taking place making sure that the bills can be paid to keep the economy going.
The only final thing that the U.S. has in its hands is the fact that it is the world reserve currency. However, that impact has quickly declined over the past few years as China and other countries have established BRICS as the biggest enemy of the NAVO and the U.S.
Additionally, more countries are opting out of the U.S. due to the current weakness of the Dollar. The economic data from the U.S. continues to show that rate cuts and QE are, again, required to keep the economy afloat.
I’ve been diving into Ray Dalio's books on the ending of cycles and debt-driven bubbles, and it’s remarkable, but we’re in the next big debt-driven bubble. Why is it so obvious that nobody actually thinks it’s happening? Nobody has experienced depression before. The last one took place in the 1930s.
During the 1920’s, gold prices were stagnant. Why was that? Precisely, the Gold Standard was in full practice, through which the price remained constant, until the big Depression of the 1930s took place and people were fed up with the economy of that actual period. Price rallied to $35 (after $20) in the years after the big fall of 1929.
Why am I sharing this? Well, currently we’re seeing that Gold has been rallying and has been printing new all-time highs, but value in the S&P, has barely moved. Inflation-adjusted, but it didn’t break a new all-time high.
In fact, Bitcoin hasn’t been breaking a new all-time high in either of the statements, so its four-year cycle is still on par.
The fact that I’m referencing Ray Dalio is the fact that we’re watching the U.S. fall down. It’s a slow process, but it’s happening. Economic data is getting worse day after day, as we can see that during this week:
Job Openings are terrible and the worst in 3 years.
ADP Non-Farm Employment Change is the worst in 3 years.
Unemployment data is still coming up, and Non-Farm Employment changes as well, but the signs are getting worse. The US Dollar is losing momentum against other currencies, as the Canadian Dollar is showing a lot of strength alongside the Japanese Yen and the Euro.
This is exactly why Bitcoin is so important to have in your portfolio. It follows the pattern of Gold of the 1930s, and it will likely be the blow-off top of this cycle. I think that the next peak of Bitcoin is going to be the peak of the entire equity markets (or perhaps they are already peaking while Bitcoin runs up; who knows?).
During periods of uncertainty and changes from the ‘Top’ to the ‘Decline’, other assets are a safe haven for people who want to opt out of the current financial system. The institutions and boomers are doing this by buying Gold through ETFs, as that’s the standard, but other countries/people are going to be doing that by buying Bitcoin, as Bitcoin is hard money, which can be easily transferred.
The moment there’s more uncertainty surrounding the strength/weakness of the Dollar and the U.S. government, that would trigger people to buy Bitcoin and other assets. That’s likely going to come out of the rate cuts later this month. Rate cuts aren’t bullish; they are a sign of weakness for the markets, and the FED is likely going to be too late again.
Why are the stock markets running up? That’s not a question of the strength of these companies, no it’s a fact of fear from the people who simply don’t have a reason to keep their money in their bank accounts as the U.S. Dollar is losing purchasing power daily. Everyone puts everything on the table in the equity markets as those have been going up anyway, so people think that this will continue to do so until it doesn’t and that doesn’t part is going to have such a massive impact in their lives.
It is very comparable to real estate markets. ‘Oh, the real estate markets have been going up for 50 years in a row, they should be going up more from here’.
Yes, they might, but taking a full salary as a mortgage at this stage is insane. The interest rates are so high that monthly payments become ridiculous for people eager to buy a property, but it’s a rat race and people feel the need to buy a property as rental prices are going through the roof as well. What’s the best solution? If you are currently renting from years ago, stay. Just stay. If you’re planning to invest in a property. Don’t, just invest in cash, commodities, and crypto and hold for the next few years.
Bitcoin is going to surge significantly from the rate cut policy and the likelihood of QE. The worse the economic data, the heavier the impact will be on Bitcoin's interest, as Bitcoin is going to serve as the safe haven that Gold was in the 1930s—not as a hedge against inflation but as a hedge against the uncertainty of a failure of the U.S.
From that perspective and the uncertainties arising in the U.S., the likelihood of DeFi starting to soar is significant as well. People are likely heavily fed up with the current financial system and don’t want to be on the brink of bankruptcy themselves because they trust third parties in the form of banks.
No, they want to have self-custody and self-control over the decisions they make, something the people in the 1930s wanted themselves. From there, trust needs to be reestablished in politics, which is likely going to take years. Let's face reality: populists, left and right, are likely going to become larger in the coming years as social unrest increases substantially due to the increasing wealth gap.
Now, I think we’ll have to wait it out for a little bit, although I suspect we’re on the edge of a potential massive breakout of the markets after either the unemployment data or the rate cuts from the FED later this month. I also believe that we’re going to see an all-around crypto cycle where RWA, dePIN, and DeFi are going to be the backbones of the actual adoption cycle. Not memecoins.
#BitcoinTherapist #EconomicUncertainty #USDollarCrisis #FinancialUpdates