Thread by @lawmaster

I've been asked by a few people what I think about the current market and the honest answer is that I have no fucking clue right now. I think no one knows. CT has just been a lot of noise and not much substance lately. Everyone is still down a lot and coping. My brain dump:

What jump-started this market last year and attracted a lot of interest was undoubtedly institutional investment in Bitcoin as a macro hedge. MicroStrategy kicked off the balance sheet trend and when Tesla announced they allocated, the market exploded. It was a validated trend

As prices rocketed up, we saw a clear significant inflow of retail customers. All the social indicators were far surpassing what we saw in 2017. A lot of trash and meme coins started rocketing up - full blow mania. Institutional capital wasn't in the driver's seat anymore.

Meanwhile, the market was desperately looking for another large company to announce they have allocated to continue the trend. Coinbase and NYDIG were both saying in Q1 that companies are lining up. None of that has materialized and insti inflows clearly slowed down.

Coinbase going public was grossly overhyped and the new interest couldn't support prices going up anymore. Retail started getting burnt on meme coins and got rug pulled on BSC time and time again. Meanwhile, none of the ETH DeFi was possible for normies when Uniswap tx cost $100+

Market started looking weak. Even clearly made up FUD crashed Bitcoin and there weren't as many people buying the dip as before. Then Elon started completely flipping his position and virtue signaling about environmental concerns (that he clearly knew about before)

As if that wasn't enough, China also started getting more serious about regulation (both mining and futures trading) and there was a lot of uncertainty. Hashrate is down almost 30% since the peak and still no one really knows the extent.

Balance sheet narrative started getting much weaker with the Elon flip. It's also going to be much more difficult to convince the board to allocate a significant amount of cash in Bitcoin after it crashed 50%+ in a couple of weeks. Or that BTC moves +-5% based on Elon's tweets

So what do I make of it? Retail is basically gone just as quickly as it showed up. Markets are clearly in uncertainty. But will we have another multi-year bear market? I really don't think so. Not saying supercycle but I am convinced cycles will be much shorter

The El Salvador development is clearly massive. There will surely be some hurdles along the way but if this becomes a trend, the market can turn into super bullish with just one announcement IMO. Bitcoin as legal tender in developing countries is really enormous

DeFi is not going away. Pretty much all insti customers that we talk to at The Block Research are always interested in DeFi. Real L2s (and not sidechains) like Arbitrum/Optimism are coming online soon and will actually scale Ethereum for the first time. I think this can be huge

Saylor has gone into an absolute bulltard mode and will continue buying until he is admitted in a mental institution. More than a billion dollars of buy pressure right now in not-so-liquid books can go a long way. And of course, everyone is trying to front-run these buys.

All of this is to say that crypto is here to stay. The buy-in is simply too large at this point. What will happen short term? I have no idea and I really think everyone is clueless ATM. Don't use leverage. It's not hard to imagine more 50%+ drawdowns or a massive run-up.

Long term we are gonna make it, friends. Everything is going in the right direction and when I look back at 2017, we have gone a long way since then. 🥂