The Big Picture /a thread
Last year Ray Dalio (most successful hedge fund manager alive) said we'd reached the end of a debt supercycle.
Supercycles last 50-100 years.
The last one ended in 1929.
amazon.com/Big-Debt-Crise…
Last year Ray Dalio (most successful hedge fund manager alive) said we'd reached the end of a debt supercycle.
Supercycles last 50-100 years.
The last one ended in 1929.
amazon.com/Big-Debt-Crise…
2/ That was the macro context going in to 2020.
What does Dalio think now?
forbes.com/sites/alexandr…
What does Dalio think now?
forbes.com/sites/alexandr…
4/ "But we’re already up 30% off the bottom”
Do you really think we've reached bottom?
Do you really think we've reached bottom?
5/ “But money printers will save equities...and now the Fed’s buying junk bonds!”
Did that just cross your mind?
Listen to how you sound.
But I’ve been wrong before. Maybe this is the new paradigm.
Did that just cross your mind?
Listen to how you sound.
But I’ve been wrong before. Maybe this is the new paradigm.
7/ Just for fun, I surveyed a dozen of the smartest analysts I follow, to find out where they though the $SPX might bottom.
There was wide variance — but the aggregate expectation was about 50% off all-time-highs.
There was wide variance — but the aggregate expectation was about 50% off all-time-highs.
8/ The price action comparison with 1929 is striking, though the fundamentals are different.
@SmartContracter breaks it all down.
@SmartContracter breaks it all down.
9/ Here’s something else to keep in mind:
$SPX is coming off of a parabolic advance.
$SPX is coming off of a parabolic advance.
10/ When a parabola breaks, its next few moves are often predictable.
It might not play out this way, this time -- QE might juice things.
But when you’re exiting a parabola, it’s good to keep this sequence of events in mind.
It might not play out this way, this time -- QE might juice things.
But when you’re exiting a parabola, it’s good to keep this sequence of events in mind.
11/ First, the grueling drop. We got that.
Then a strong correction -- putting in a higher low.
The higher low most often retraces to just about exactly 15% off ATH’s — usually within 1-2% of that level.
Then a strong correction -- putting in a higher low.
The higher low most often retraces to just about exactly 15% off ATH’s — usually within 1-2% of that level.
12/ Have a look at some of these historic bubbles and see for yourself.
Plenty of hedge fund manager's careers have been made shorting this exact pattern.
Plenty of hedge fund manager's careers have been made shorting this exact pattern.
13/ Does it *have* to go to 15%?
Of course not.
In 1929 it stopped at 23%.
(Tho we’re above that level already).
Of course not.
In 1929 it stopped at 23%.
(Tho we’re above that level already).
14/ Where are we now?
$SPX just bounced off the 15% retrace. Dead perfect hit.
This time could be different -- money printer could juice things higher.
But ask yourself: having seen oil futures go sub-zero -- does it *feel* like the bottom is in?
$SPX just bounced off the 15% retrace. Dead perfect hit.
This time could be different -- money printer could juice things higher.
But ask yourself: having seen oil futures go sub-zero -- does it *feel* like the bottom is in?
15/ One possible scenario:
$SPX could range around here for months.
This could be the level where the law of gravity meets The Man behind the curtain.
Fed could keep things floating here awhile.
$SPX could range around here for months.
This could be the level where the law of gravity meets The Man behind the curtain.
Fed could keep things floating here awhile.
16/ A top here would certainly fit the narrative.
17/ If & when we leg down, risk-on assets like $BTC probably sell off.
Bitmex liquidation engine won’t make the same mistake twice.
But bitcoin could fill low orders.
Bitmex liquidation engine won’t make the same mistake twice.
But bitcoin could fill low orders.
18/ I’m ok with all this.
I keep thinking about what my man @BTC_JackSparrow says, about liquidity game theory.
Most $BTC is already in strong hands.
Beyond a certain point...the more time passes, the tighter hands gonna grip.
I keep thinking about what my man @BTC_JackSparrow says, about liquidity game theory.
Most $BTC is already in strong hands.
Beyond a certain point...the more time passes, the tighter hands gonna grip.
19/ An unprecedented flood of stablecoin is being issued.
It's likely liquidity for:
-Chinese wealth bypassing capital controls
-Institutions that’ll de-risk on the next leg down
-Smart money accumulating a fixed-supply hedge against collapse
It's likely liquidity for:
-Chinese wealth bypassing capital controls
-Institutions that’ll de-risk on the next leg down
-Smart money accumulating a fixed-supply hedge against collapse
20/ $BTC is experiencing Tether printer divergence.
That story always seems to end the same way.
h/t @BTC_JackSparrow
That story always seems to end the same way.
h/t @BTC_JackSparrow
21/ And the view from on-chain is fascinating.
@glassnode reports there are now more $BTC whales than at any time since December 2017.
I cannot express how bullish that is.
@glassnode reports there are now more $BTC whales than at any time since December 2017.
I cannot express how bullish that is.
22/ It’s bullish *big picture* — but a sweep of the lows could come first.
If we leg down, I’m a buyer from $5600 on down to $4800.
If we leg down, I’m a buyer from $5600 on down to $4800.
23/ I may load up on $ETH too, as it nears transition to proof-of-stake.
Yield-seeking $ETH whales will lock up a lot of supply moving forward.
Though not a fixed-supply asset, $ETH may outperform $BTC in the next bull market.
Yield-seeking $ETH whales will lock up a lot of supply moving forward.
Though not a fixed-supply asset, $ETH may outperform $BTC in the next bull market.
24/ *Anything* could happen moving forward.
Laws of physics seem to break each week.
📌 Don’t be all in
📌 Don’t be all out
📌 Amp down counterparty risk
📌 Market is always right
📌 Generational opportunities exist *if* you know where to look
Laws of physics seem to break each week.
📌 Don’t be all in
📌 Don’t be all out
📌 Amp down counterparty risk
📌 Market is always right
📌 Generational opportunities exist *if* you know where to look
📌 Where to look? “Those who know don’t talk”
📌 Ask yourself *why* they don’t talk. That'll help you find it -- it's not in crypto.
Bottom line, this shitshow probably keeps going on for awhile.
You will outlast it. 👊
And you're *never* gonna forget going through this.
📌 Ask yourself *why* they don’t talk. That'll help you find it -- it's not in crypto.
Bottom line, this shitshow probably keeps going on for awhile.
You will outlast it. 👊
And you're *never* gonna forget going through this.
