Throughout the several years I have been investing in the Bitcoin market, I have never seen the mood of the market as bad as it is now.
Not during the COVID price panic, not during typical bear markets, and not even during the FTX collapse. Something is different this time.
For the first time, I have seen such an indifference to the Bitcoin and cryptocurrency market that it has made me consider how we can ever come back from this. Retail buyers are gone, and they may never be coming back.
How did we get to this point?
All the Cards Were Lining Up Perfectly
This was supposed to be the cycle where Bitcoin finally made its big move and took the world by storm. It appeared that nothing was going to be able to stop the momentum that we had going.
The first step was that the long-awaited spot Bitcoin ETFs were finally approved in the US. Over the years, “experts” told us that once these ETFs were approved, they would cause a stampede rush into Bitcoin that would cause one of the largest transfers of wealth the world has ever seen.
Next, companies such as MicroStrategy were beginning to put Bitcoin on their balance sheets and even became BTC treasury companies. With MicroStrategy now owning nearly 850,000 BTC and with other companies aggressively joining in, the feeling was that there would soon be an extreme supply shock that would cause Bitcoin to go parabolic.
If that wasn’t enough, Donald Trump announcing that he would create a US Strategic Bitcoin reserve took the Bitcoin market by storm. It felt like nation-state game theory was about to begin. From that point on, it would be a game of musical chairs, and no country would want to be the last country standing without owning any Bitcoin.
The final cherry on top was that the most recent Bitcoin halving also took place. An event by itself that has been the catalyst of most Bitcoin bull markets.
Taking into account all these unprecedented bullish factors, it had financial experts declaring extremely high price predictions. It wasn’t a question of IF Bitcoin would ever reach $1 million per coin, but instead the only question was WHEN.
The Disappointment
During this cycle, there is no denying that Bitcoin did see initial success, rising all the way above $120k. Yet it is still considered a very disappointing bull market.
With all of those bullish factors that I mentioned above, only managing to do a 2x from the previous bull cycle was a real letdown for many users. Expecting BTC to go to $500k at the very least, yet only managing to reach $120k was a difficult pill to swallow. If all of those bullish factor taking place at the same time, couldn’t take this market to the moon. What could?
Even more difficult was the performance that the rest of the cryptocurrency market saw. At least Bitcoin can say that it made a new all-time high and saw a bull market. The harsh reality is that most altcoins didn’t make a new all-time high this cycle and are actually down badly compared to previous cycles. Many are still down 90% from their previous highs. The truth is that a large percentage of people haven’t been making money in crypto for a long time.
Retail Buyers Have Been Burned Too Many Times
Fool me once, shame on you. Fool me twice, shame on me.
The crypto narratives that have brought retail buyers into the market have ended up burning them time after time.
Ranging from ICOs, meme coins, disappointing airdrops, NFTs, celebrity/president coins, or even crypto yield companies and exchanges going bankrupt. The end result is regular people losing a lot of their hard-earned money.
You have to begin to ask yourself if you lost what you consider to be a large amount of money in the crypto market, leaving you with a bad image of crypto. What would ever convince you to come back?
That isn’t even beginning to mention that with inflation around the world, people are having a difficult time just making ends meet, let alone having enough money to invest in a risky asset class like cryptocurrency.
A.I. Is Sucking the Oxygen out of the Crypto Market
Finally, what hurts the most is that this was supposed to be the cycle where Bitcoin and crypto made it. With everything lining up perfectly, this was the time long-term investors would finally become wealthy.
But then A.I. completely sucked all the oxygen out of this market. A.I. became the hottest narrative of the future, where everyone began believing was the place where money could be made.
The result was that a large percentage of the capital that would normally be invested in the crypto market was now being devoted to A.I. It’s very painful to watch A.I. class assets succeed while the crypto market only seems to have pain.
What Can Bring Crypto Back?
Sometimes the biggest challenges you face become your biggest strength.
That is exactly what I believe is happening to the cryptocurrency market right now.
Since I’ve been in this market, there has been no rhyme or reason for which crypto asset would perform well. All of crypto seemed to follow Bitcoin like a magnet, regardless of merit.
Thankfully, the crypto market is maturing and moving in a direction where real projects with a real need and merit will perform incredibly. Projects like Bitcoin, Ethereum, Zcash, and others such as Hyperliquid and Lighter. Projects that have a real need, product, or use case and are gaining actual adoption will be the real winners from here on out.
What this means is that you won’t be able to just pick any project and get lucky in the future. You will have to begin putting some real research into the crypto assets that you invest in.
Bitcoin and crypto are here to stay. This is arguably the darkest crypto bear market that I have ever seen, but light is at the end of the tunnel, and we will come back stronger than ever before.
How about you? What do you think is the catalyst that will bring back crypto?
As always, thank you for reading!
