Once you have invested in cryptocurrency for a certain length of time, you begin to see trends.
First, the Bitcoin halving occurs, which cuts the issuance rate of new BTC in half. Then, approximately six to eight months later, the halving eventually causes a supply shock that results in Bitcoin’s price going parabolic.
After Bitcoin has pumped sufficiently, that is when Ethereum and other coins begin to move. This period has often been coined, Altcoin Season. Finally, after both Bitcoin and altcoins have soared tremendously, that is when we have a price blow off the top type of moment that sends us into a multi-year bear market. Only to repeat this entire cycle once again.
However, there is one crucial component of the cycle that I left out. The absolute euphoria and FOMO during the bull run.
During past bull cycles, you could feel the FOMO in the air. It was everywhere. It seemed like everyone was making money, and all anyone wanted to talk about was crypto.
Twitter was the hotspot to get involved in crypto. If that wasn’t your thing, Bitcoin podcasts were springing up everywhere, and even more crypto-related YouTube channels were being created. Crypto was truly everywhere, and the excitement was palpable.
But something is different this cycle.
The mood in this market is completely different compared to previous cycles. In fact, both Bitcoin and Ethereum have made new all-time highs, but it’s still very likely that you aren’t hearing regular people talking about crypto. Something that is in complete contrast to previous cycles.
I have been thinking deeply about this for the last few months about what the causes for this difference could be, and these are what I came up with.
1. People are Having Difficult Financial Times
There is no denying that the world is in a rough spot. Inflation has risen through the roof, yet salaries have stayed pretty much the same. People are now having a much more difficult time just making ends meet each month and have little to no extra funds to invest into crypto each month.
2. People Have Been Burned By Crypto
The previous cycle was a time of self-inflicted wounds to the cryptocurrency industry. It seemed that everywhere you looked, companies were going bankrupt. Especially the companies that you could lend your crypto to in order to earn interest. Companies such as Celsius, BlockFi, and FTX. Many people lost their crypto to these companies. Imagine if you lost a large percentage of your crypto to one of these places; the heartbreak would be immense. For many, the pain would be too much to ever consider returning to crypto.
That isn’t even considering the people who lose money investing in meme coins, NFTs, or other altcoins.
3. Bitcoin and Crypto are no longer the New Open Frontier
Crypto investors love to call this market the last open frontier. Where everything is new, you’re free, money is to be made, and no one knows what will happen.
In the past, this was definitely the case, but it appears that those days are quickly coming to an end.
The reason for this is that Wall Street has officially entered the game. With ETFs, treasury companies, and countries all accumulating Bitcoin, this meant our bags would be pumped immensely. But we have lost something along the way. The market has become more like other traditional financial assets, and not as much about changing the world. This isn’t set in stone for how it will be forever, but I do believe this is a big reason for the change in the market. You could argue that banks and Wall Street are here already during this bull market, but retail buyers still haven’t entered the market.
4. Altcoins have Severely Underperformed
Bitcoin and a few select projects have performed extremely well this cycle; however, there is no denying that a majority of altcoins are still very far down from their previous all-time highs.
When people are losing money, they are much less likely to even want to talk about crypto or invest more money in the market.
How about you? Can you feel that the mood during this crypto cycle is completely different?
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