I’m sure many did well in the October-March period, but most were late and early to the alt season. After all, historically alt seasons have started after rate cuts. So my sense is that most markets gave back their gains in Q4 2023/Q1 2024. Many sold as markets fell. Others are reallocating.
“Retail will never come back.”
This is exactly what we need to see from a sentiment perspective. Now that the Fed has started a rate cut cycle, there are several catalysts pointing to another blowout top in the market:
Allowing easing. A Fed rate cut is effectively allowing every other central bank in the world to cut rates. We’re already seeing the ripple effect from this in China – which is currently stimulating its economy heavily. It looks like they’re waiting for the Fed’s green light. To be clear, when the Fed cuts rates, the dollar weakens, reducing the risk of Chinese capital flying to the dollar – giving China more flexibility to cut rates while keeping its currency stable. This dynamic can apply to all central banks around the world.
Politics. I hate talking about politics. But we have to address this because it really matters. At least in the short term. The key point here is that I believe Democrats have realized that crypto is not going away. Just look at what happened in ’23. The year started with Operation Choke Point — the Biden administration’s unconstitutional attempt to cut off crypto businesses from access to banks. It failed. And Bitcoin is up 187% for the year.
