GM frens.

It's never a dull day in crypto.

In last week's newsletter, I said that by the time I send out my next newsletter, we might have already hit a new all-time high.

And as I predicted, we did hit a new all-time high above USD69,000 on Tuesday. 🥂 

However, within minutes of hitting the new all-time high, bitcoin plunged more than 10% as sell orders poured in and many traders betting on rising prices were liquidated (aka forced to sell). It was bitcoin's way of reminding all of its new investors: Remember, folks, I'm a volatile beast!

As of Thursday afternoon, the price has recovered slightly to the USD66,000 range.

Because it was so much fun, here are my favorite memes of the week:

Memes of the week

Now, (clears throat), let's take a look at where we are in the cycle and what this all-time high tells us.

DISCLAIMER: This newsletter is not financial advice. It does not take into account your financial situation, is general in nature, and is for educational purposes only.

Where we are in the cycle

Typically, a new all-time high occurs 12 to 18 months after a halving.

As a reminder, the halving cuts the number of new bitcoin coming into circulation in half. In other words, it's a supply shock that occurs roughly every four years and has historically led to higher prices.

This time, however, we have reached a new all-time high more than a month before the next halving, which is scheduled for 21 April.

So the question is, is this cycle different?

In short, two theories are floating around:

1. The left-translated cycle

   Simply put, this theory says that we'll get a cycle peak sooner than we've seen in previous cycles.

2. The supercycle

   This theory says that we are about to see an extended period of bullish growth over several years without major setbacks.

I'll be very brief and give you my take on these theories:

1. Are we in for a left-translated cycle?

   Maybe. It's too early to say definitively.

2. Will we see a supercycle?

   Probably not. If it sounds too good to be true, it probably is.

Here are my thoughts

Here’s what I’m seeing:

1. Bitcoin ETFs have only been around for two months, but they have been a huge success. BlackRock's bitcoin ETF IBIT, just one of ten ETFs approved in January, set a new benchmark in the ETF industry by reaching USD10 billion in assets under management on March 1, just seven weeks after its launch. It was the fastest ETF to reach this milestone. Tldr: The ETFs are leading to increased demand for bitcoin.

2. The halving will reduce the amount of bitcoin produced daily from 900 to 450. Tldr: The supply of bitcoin is about to decrease.

3. Put the two points above together and you have an explosive cocktail. Below you see what I think are the most important numbers right now. What you see is the number of bitcoin bought by ETFs in the week from 24 February to 1 March compared to the number of new bitcoin produced in that week. As you can see, the ETFs bought five times more bitcoin than miners produced. (Just in case there are newbies here, the miners can't produce more.) After the halving, this multiple will double. Tldr: Demand already far exceeds supply. This imbalance will increase drastically.

4. In addition, interest rates are likely to fall later this year and global liquidity will increase. That's fuel for "risk assets" like stocks and crypto. Tldr: There will be more money chasing assets, which will cause assets to rise in value. 

If you think I might be right, but that all of the above information is already priced in because markets are efficient and every piece of publicly available information is reflected in the market price, then I have a quote from good old Warren Buffet for you: "It is crucial to understand that stocks often trade at truly foolish prices, both high and low. Efficient markets only exist in textbooks."

Here is what I’m doing

Right now, I'm sitting on my hands, doing nothing. That's because I think we've only just entered the bull market. So there's still a lot of upside to capture.

Will the bull market peak sooner than between April and October 2025, which is the all-time high window for this cycle based on historical patterns?

Yes, maybe. And I probably won't be able to time the market perfectly.

That's why I've decided to trim my bitcoin holdings when the price hits USD130,000. I think we will see the price go beyond USD150,000 this cycle, but I want to leave myself a margin of error. That's how I arrived at USD130,000. Whenever we hit that number, I'm going to sell a little bit. Could be later this year, could be next year.

USD130,000 may sound like a lot. But remember, that's only +100% from where we are now. Bitcoin is up +200% over the last year and we are just now entering the bull market.

For the rest of my bitcoin holdings, I'll continue to hodl (bitcoin speak for hold).

That's it for this week. I hope you have enjoyed this newsletter. See you next week!

Before you go, please help me get better!

Feel free to drop me an email or dm me on Instagram, LinkedIn, or Twitter with any feedback or topics you'd like to see covered in this newsletter!

Thank you!