1/ I believe that financial product innovation drives market cycles. New methods of access and leverage improve ability to speculate, and if the underlying is bullish, they can dramatically enhance returns. 1920s, for instance, was so powerful due to the introduction of margin.
2/ The 1980s, as well, was so incredibly powerful due to the introduction of futures trading on the S&P 500 in April 1982. Some of the most famous investors/speculators made the bulk of their wealth in the 1980s (Soros, Tudor Jones).
3/ When SP500 futures were introduced in '82, the market fell an abrupt 15% afterwards. Once the new instrument took hold, I feel it was instrumental in the extreme uptrend that ultimately led to the 1987 crash.
1/ WINNING TWICE: One of the most psychologically damaging situations for anyone trying to perform or gain an outcome is the situation of having to "win twice." You think you have it locked up, only to have that snatched from you. Now you need to win again.
2/ The best example of this is the Cubs vs Marlins World Series in 2003. The 6th game, Cubs lead series 3-2, eighth inning Cubs up 3-0. Cubs haven't won a world series since 1908. They basically have this game locked up. Then this happens
3/ After this freak event, the psychology of the Cubs is destroyed. They now need to "win twice," which is overwhelming. Their nervous systems fall apart. They literally cannot field balls or catch anymore. They give up 8 runs that inning, Marlins win, then take World Series.
1/ This is the Gym Theory of Markets. It is a diagram to help identify and explain the groups that act on price in markets (especially BTC). Imagine this as an actual gym, with a line down the middle and 2 doors (both on the sell/cash side of the gym). Imagine the dots are people
2/ People enter the gym first by being in cash (entering through the door and sitting on the sell/cash side). When they move to the buy side, price increases. When those on the buy/hold side move to the sell side, price decreases.
3/ How fast they come through the door and go to the buy side defines the long-term trend of the asset. I would argue Bitcoin has one of the greatest trend velocities in all assets, maybe in history. As well, the buyers have one of the highest "demand to hold" and don't sell.