Thread by @RaoulGMI

Wow, everyone has gotten super bearish on everything in digital assets

I do think crimped excess disposable income due to inflation is partially to blame. The marginal retail buyer is more… marginal 1/

YoY rate of change of Fed balance sheet is also a factor but in past cycles risk on continued in the main.

But a lot is position squaring and rebalancing after a good year of owning risk. Tax selling too.

But my view is that the game hasn’t yet changed…

And many are scarred by past cycles when this point in the halving cycle produced the top.

But past damages to your psyche can also cause you to be excessively cautious in what appears to be an elongated cycle or change of structure

But we haven’t seen a blow off top with record participation. We have seen speculation of some size in NFT’s but that is mainly people who already have ETH and have profits to burn

Funds will be allocating fresh p&l and new mandates in Q1 and if that drives prices sharply higher, it will bring record new wallets etc and long term holders will begin to put coins on exchanges to top slice.

Remember - digital assets overall have gone nowhere since May unless you were lucky to nail a pump.

But the rally from the July low has seen most digital assets well below their highs.

But meaningful institutional adoption is underway, along with exponential new use cases

Plus a rising realization of the importance of Web 3.0 by artists, musicians and brands. Some are cash grabs but many are not.

Some sort of tipping point has been reached…

And I think it accelerates later this month and well into next year, when it might get very frothy…

But that is not now.

Sit tight, add on dips and if we see another sharp rise in the entire space, reduced your more speculative holdings and rotate to higher quality.

Also don’t follow the pump. By the time you get in it’s too late. Be diversified in the small stuff

Unless you are an expert…(I am not)

If you want to use leverage, add small premiums in options that you can write off.

Layer 1’s of BTC, ETH, Luna, AVAX and SOL are the better core holdings.

NFT’s are most speculative but are also innovating fast so have a bit of that too.

Most of all, don’t get stressed by shorter term moves if you are playing the long game.

If it stresses you, you are too big and it matters to your overall life plans too much.

We all have a lot riding on this but you can’t weep if it goes down 50% and chops for a year

Or whatever..

We don’t know the short term path but with high odds, we know where is it going.

Again, if you are demanding answers on Twitter as to when the rally might re-commence, you are too exposed.

The long game is all about sizing and watching the charts for fun but not really caring until deeply excessive speculation is rampant (then take 50% or more off and grab stablecoin yields)

The next phase is the shift from retail to institutional. It’s been building all year but 2022 is the year I think the BIG herd arrives.

However, I am not a guru! Good luck and gn!