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Many people believe that the crypto winter is over. Here are some of my unfiltered thoughts on this topic. Charts & technicals aside, I don’t believe this rally is sustainable for one reason: The market has not yet decoupled the various crypto assets from Bitcoin.
This means that as the Bitcoin price rises, so does the price of other crypto’s, irrespective of value. This is a key point - Bitcoin could double overnight, but does this mean other assets should too, even if nothing has changed on their end in term of development, network etc?
It’s easy to argue that Bitcoin can be worth $10k or $20k, or even $100k, but the problem is that as the price has been rising towards those levels, we’re not seeing Bitcoin dominance increase disproportionately.
So, even if the Bitcoin network effect or store of value hypothesis results in an increased price, this currently translates into broader market based upon sentiment, not fundamentals. So in practice, other cryptos get a boost from any improvements in Bitcoin fundamentals today.
This makes no sense. How can we have a situation where the market price of one asset dictates the value ascribed to other unrelated assets ,irrespective of whether or not anything changes in their own separate networks.
The key indicator for the start of a sustainable bull run is likely a decoupling of asset values from Bitcoin (i.e. Bitcoin’s strength weakens other networks or vice versa). Anything else is just speculation again (maybe we need another bubble to learn more lessons? 😉😂)...
That said, if we can break $6200 for BTC, it will likely mark the start of another major bull run and could run hot and high, but if it’s pure speculation and other assets benefit disproportionately to value created, it’s likely not going to end well again!
