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Tuesday, October 4, 2022

The Crypto Market – My Thoughts

What’S going on everyone, my name is nicholas merton here at datadash and today is january 21st of 2022.. Well, folks, i hope you are having a fantastic day wherever you are and in today’s video i want to go ahead and do a little bit of a ramble session with you guys. I want to just talk one on one: no charts, no headlines. No major market analysis, you’re, just gon na, have to see my face and hear me ramble for a little while.

But i feel that if you can stick around it’s going to be a very valuable video for you guys, because i understand as much as the next person. It’S obviously not fun to see the markets doing what they’re doing 2022 for crypto markets has not been a clean start and it’s got a lot of people worried about the state of things and rightfully so it’s always difficult to get through difficult price action right. So i want to go ahead in today’s video to talk about three key things. I want to first spend some time to talk about what i’m doing, let my actions speak louder than my words and then outside of that as well. I want to spend some time to talk about short-term analysis, what expectations we should probably set into our minds, at least to keep things as conservative as possible and finally talk about the macro perspective, not just the long-term analysis for bitcoin and crypto, but really what’s going On in the dynamics of asset markets as a whole, including the stock market, etc, all right, so let’s go ahead and start with the obvious thing that is on everyone’s mind rightfully, so you might be asking yourself nick um.

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What are you doing in the market right now? Are you buying? Are you selling? Are you more bullish or bearish, and also depending on where i am? What should i do well i’ll, go ahead and answer the question that is probably the most obvious.

What am i doing now for myself guys, i really haven’t been changing much, i’m still exposed to crypto heavier than any other asset on the planet and outside of that as well. The only real thing that i’ve done just for full transparency’s sake is, i have had to sell, like small fractions of my portfolio, but that’s been only either to cover like pretty much necessary expenditures or to pay for my quarterly or annualized taxes that i have to Pay being a u.s citizen and that’s always a joke that i get from people nick, did you move and stuff for taxes? No, i didn’t. I still pay my lovely u.

taxes always haven’t always will um, but that’s basically what i’ve been doing. I haven’t really changed. Much at all, i’ve just been passively going through the upswings and the downswings in the market, and, ironically enough, when i have to end up paying my my taxes for the annualized basis, i realize, like man, we’ve really come a long way since 2019. 2020. 2021.

Even though the new year isn’t off to a great start, we’ve had a lot of great price action. Now that may not be the case for when you started in the crypto market, or maybe, where you’ve really gone heavy in your investments. Maybe you went in heavier around the 40 50 60k range rather than where i’ve been, which is where you know. I really started building heavy positions back in 2019 and 2020 on top of the existing positions i already held, and i understand that, depending on when you got in the market, it can be really different right. I might be in a much more comfortable position where i can tolerate the volatility, but for you you might be 30 40, 50 down uh from your initial investment and maybe your first time investing in the market.

So i want to go ahead and just speak from experience in this case, because i’ve gone through pretty much any kind of phase. I’Ve been through many market cycles, i’ve traded and invested in different markets and i’ll tell you guys this. The key thing that you need to accept at the end of the day when you have a position in an asset as much as it is important to hedge, your wealth against inflation against. You know the devaluating purchasing of your dollars and also to look for alternatives. Other than just having your money in a savings account, you also need to assess and understand that there’s going to be excessive volatility in asset markets, especially emerging ones, that make heightened annualized returns like cryptocurrencies.

If you look at any cryptocurrency chart whether you’re looking at bitcoin ethereum, your favorite altcoin uh right, if you look at the established place in the market, they make up the majority of the market cap for crypto they’ve gone through excessive upswings and downswings, and you got To be willing to stomach those rallies and if you aren’t able to stomach them, it may not be that you’re, just not able to think straight in this case, don’t beat yourself up guys. Like i mean everyone is definitely going to be thrown off a bit, but what it could be telling of is that you may be overexposed to one specific asset. I think it’s uh, you know, i think it’s warren buffett. That said something i hate to. I hate to be that basic guy, like warren buffett, said, but honestly.

I think that warren buffett and many other successful investors have pointed to the fact that if you are in a position that you don’t feel comfortable being in for the foreseeable future for the next year, 10 years, um, you shouldn’t be holding it right and i wouldn’t Say that that’s entirely true in the world we live in nowadays, but if you don’t feel comfortable stepping away for a year at least or a couple of months in your position and not caring about what it’s doing on a day-to-day basis, you’re either short-term trading, which Most people are going to fail at doing over 90. Five percent of people will lose money in traditional markets. Trying to trade and uh worse off is that even if you’re able to make money, considering taxes, fees, etc, um you’re gon na probably still not make more than you would have long-term training. Only about one percent of traders, one to two percent – meet that category uh and second off. Maybe that you’re overexposed – and that’s probably the more obvious question um – is that whether or not you have too much exposure to the crypto market and as much as i always talk about you know, waiting and buying.

You know accumulating dollar cost to averaging buying the dip. Um, don’t over expose yourself and outside of that. Another important thing to take into mind is that, if you’re, really in the camp of people who’s been in the market since 2019 2020, there is nothing shameful or wrong about taking profits. If you have made life-changing returns and you’ve got family members and friends and things that you know things that you want to support and love and care for, and you know trips that you want to take and experiences that you want to go experience in the world That you wouldn’t have been able to do before. I think it’s completely rational to want to take profits.

You have every right to do that. It’S a buying and selling market. You can be on any end of the stick and yeah. Don’T let anyone shame you out of that position or make you feel about it and don’t get locked in the idea that i have to constantly accumulate assets, because this is going to lead me to talking about the short-term and long-term vision here, which is that all The while we are still confident as much as we’ve been calling for the short-term bearishness here, the idea that the market is going to come back down to the 30k support range. We’Ve talked about the idea that we will continue to rally up higher.

We are still likely in a bull market, but shortly after the close of 2022, i think, with the pressures we’re seeing from the inflation that we’re seeing in the united states that we’re seeing um and a variety of economies across the world. It’S not just in my little bubble in the u.s, it’s everywhere, that’s starting to feel the pain of inflation and the excessive money printing that had been going on in 2020 and 2021. I think we’re at a point where the fed – probably not here in the quarter, one of 2022, but probably into 2023. They are going to have to pull the switch and they’re gon na have to pull it hard.

And what i mean by that is that they’re going to have to stop the printing of excessive money, uh they’re, going to have to begin strict, quantitative, tightening and outside of that they’re also going to have to start leveraging interest rates back upwards quite heavily. I don’t know if it’s going to be something like paul. Volcker did back back a couple decades ago where inflation was out of control back in the 70s and 80s and basically, they levered up interest rates incredibly high to kind of stun the excessive credit in the market. But i digress that basically will mean if this happens. If the fed does make this move – which everyone, i think, is kind of fearful of it happening here in quarter one of 2822 – and i think it’s going to be more likely, uh 2023.

When that does happen, crypto stocks, you name it asset markets – will be in turmoil and they’re going to face a lot of pain and might enter into a substantial bear market. Not the 20 bear market definition, uh used by textbook economists when it comes to the stock market. I’M talking a 50 60 correction, a pretty bloody sell-off, the one that everyone says. Oh it’s always gon na happen and stuff uh, because the fed runs out tools. They only run out of tools when it comes to the point where inflationary pressures start to come into the economy, and it really starts to impact the physical economy.

If we didn’t have real inflation and there wasn’t such an outflow of capital from equity markets into the real world and the real economy buying goods and services, then we wouldn’t have such high inflationary pressures and the fed could just keep kicking the can down the road Asset prices could keep going up as long as they want, because the fed has unlimited printing capacity and they can keep interest rates near zero and for, however long they’d like until that inflation, air pressure comes up, and i think that’s what we’re seeing here on the Macro scale i mean in the in the body, administration, uh and the fed. The the pressure is is on here for something to happen in the next couple of months. The next year, uh, for you, know, there’d, be some kind of action and that is going to harm crypto markets. All those people who again uh use terminology like the super cycle or uh bitcoin, could easily go to to a million dollars or five million dollars in the next one or two years. Um.

Let’S just say folks, you shouldn’t be following people like that um. I think something rational, like 100k 150k 200k very doable in this cycle right having bitcoin at a four trillion dollar market cap is pretty doable for it to go to um. You know a million dollars, that’s uh, going to be asking in this case for a 5x multiple right from our our most optimistic projection. So 20 trillion dollar market cap give or take it’s just not going to happen uh. Unless again, the fan were to lose pace on hyperinflation, so anyways, i’m rambling a little bit.

What i want to get to here is this guys um again, don’t believe uh at the end of the day, that crypto is absolutely invincible and that it’s not able to succumb to volatility and market uncertainty. There is a very big problem that the market’s got right now, even though i don’t think it’s going to set us in a bear market um. Nonetheless, there is a lot of greed in the market. A lot of people who are over leveraged, who are not learning from previous mistakes because of the excessive greed and leverage that’s in the space right now, it’s going to make these volatile swings even more brutal than they were before and that’s why we’re getting much more Heavier mid-cycle corrections this time around than what we’ve got in previous cycles and we’ve got to adapt to those what’s great about it as well. Is that while other people are being greedy and getting liquidated in their positions, and if you guys have been in those shoes, i’m not insulting you here right, i’ve had to make mistakes.

I i leveraged traded in 4x markets. I’Ve seen how the exchanges they play against. You they know exactly that you’re going to fail, they can coordinate it, it’s like a casino and they have some of the best mathematicians right. I digress, though, the point of it is that while people are getting greedy and eventually getting liquidated, this allows us to have these great discount opportunities in the short term. And again, i would stick to my guns that hey, if i have some money that i’m willing to lose, i would definitely like to put in that position and take my odds and see if the market’s going to return up higher.

That’S the name of the game of assets, buy low, sell, high or hold it as long as you can afford to to avoid any tax liabilities and to just simply let your asset appreciate right. That’S the name of the game when it comes to asset markets, so yeah um, i i’ll say one thing guys and i do i do want to apologize about this, even though i i think you know to my best knowledge, i think we’ve been pretty accurate on Predicting what’s going to follow over the past couple weeks, i i don’t want to come here and be in a told you so attitude and i put out a tweet this morning and stuff um kind of explaining my rationale for the past couple months, going against the Grain people who were talking about the super cycle people were promoting leverage trading people who said that it’s just inevitable. That 40k is the new support. I i it is a little bit frustrating, but at the same time i want you guys to make that judgment call and i’m sorry if i’ve been uh a little bit um putting myself up on a pedestal in a sense of that. My opinion is just proof.

I mean it’s not i’ve made wrong calls in the past. I believe back in 2018 that we were going to rally up back past the all-time highs. I made like a couple bad calls over the years, but what i hope to do here on the channel is at least take a look back at my past and learn from my mistakes and it’s a problem that i see a lot of people struggle to do Themselves, which is to go back in the past and be like man, i made this call and it was totally off. What did i get wrong about it like, and maybe what can i learn from that mistake so that i don’t make the same mistake in the future and my whole rationale and why i’ve been beating it like a dead horse, which is this point about the in The short term things are just going to get worse for now, until they get better is because i’ve always rooted myself instead of conservative time from estimations and conservative price frame estimations and the reason why it’s better to be on that end of the stick and potentially Be proven wrong is because, unlike someone who sets really heightened expectations, and then is let down by those expectations heavily in this case, if i get blown away by my conservative estimations that i’m along the market, i’m happy right – it’s not just because of like hey. You know i wasn’t wrong on that.

No i’ll admit when i was wrong for sure, as we have on previous mistakes from in the past. But it’s nice to have your conservative estimations, be blown away on the upside and things be better off than you expected to be positively surprised, rather than negatively surprised, and i find that that’s the probably the biggest thing. It’S not so much the price estimations. But it’s the time frame, estimations and that’s why we’ve been big on the expanding cycles? It’S why we’ve been talking about having a longer term time frame understanding that these volatile swings are likely nothing more than mid-cycle corrections and as people, i think, will start to see as we revisit back down to the lower thirty thousand dollar range you’re going to be Hearing a lot of people talking about being a bear market this and that i wouldn’t listen to them.

I’D watch what the fed does and if the fed is making serious moves to initiate quantitative tightening that’ll. Give you your answer as to whether or not we’re going to bear market or not until then, until the fed stops talking and actually starts doing, i’m a believer in assets being the best place to be hedged and especially when i can get them at discounts, not At new all-time highs, where everyone’s claiming the super cycles inbound follow this one data science model, it’s full proof right. That’S not the kind of mindset that i want to establish within you guys, or at least share, as you guys are taking my opinion alongside many other people’s opinions out there. Now, if you’re crazy enough to have stuck around this long to hear me ramble, you deserve a gold medal. I appreciate it and i hope you guys again can look past any flaws that i might have i’m not perfect um and i don’t want to claim to be.

But at the same time, i really want the best for you guys and that’s why i’m you’re rambling in front of the camera, rather than going on about the next latest and greatest altcoin that you have to buy or uh here’s how you can use my buy Bit referral link, i don’t know guys anyways. I know it’s a rough time in the market to take this time to step away from the screen realize that a lot of times it’s short term go enjoy time with family with friends. Uh connect with other people in the crypto space have a good laugh share. Some memes enjoy the moments that you have here right now, rather than mourning on the potential gains you could have made by selling your crypto earlier on. The vast majority of us wouldn’t have done it back then, and in hindsight it doesn’t really add any benefit to think about what we could have done in the past.

More than anything you reflect on it, you’ll learn on it and you make the necessary adjustments going forward. It’S the only way we can turn failures into us, eventually succeeding in the future, all right, i’m rambled on enough. Thank you guys for listening today. If you like, this video consider dropping like subscribing hitting the bell icon and, most importantly, what really helps the channel out is the first video especially like this in a time like we’re in sharing it with family and friends. I think it’s something that we could all use right now, but nonetheless thank you all so much for watching and i’ll see you all in the next one take care everyone

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