The Future of the Crypto Market

A few thoughts on the next major BTC rally.

I think most people would agree that the next really big crypto rally will involve institutional money. The last one at the end of 2017 involved mostly retail and individuals, but the next one will involve banks, investment funds, and the big money. In all likelihood, it will dwarf the previous rallies. This is when we will see a very similar correlation to the tech boom and bust of the late 90's. The late 2017 wasn't a true bubble, I think the next huge rally will be what people will consider a true bubble (despite all the talking heads that will call every crypto rally a bubble). It will likely go very similar to the dotcom bubble with institutional money making huge gains and everyone buying up all the worthless cryptocurrencies and tokens in the process. Then at some point, the big investors' algorithms will tell them to sell and there will be a huge drop similar to the early 2018 crypto drops and the dotcom bubble bursting in March 2000.

The thing about the dotcom bubble is that if you held the right stocks (google, eBay, PayPal, etc.), you did quite well over the long run. It will likely be similar after the next big boom and bust in crypto. Hold the right cryptocurrencies, and it won't matter. But alot of useless tokens and coins will die out.

There is a major wild card in this cycle though, and I don't think anyone knows how it will factor in. Bitcoin (and other cryptocurrencies) offer something the dotcom stocks didn't offer: a store of value. So even after the next Bust, bitcoin will still be valuable. How big of a role will that play? Who knows! But it will definitely be a factor.

All that to say, a major rally is coming, it's just a matter of when. Unfortunately, it is likely that a major Bust cycle will follow. The key is finding when to get out. There are lots of tools - Gann, Elliott Theory (Elliottwavewave.com), Cosmic Theory, Geometric Theory (Geometricthinking.com), etc. But there are also the common sense tools. When your grandparents start investing, or when you start seeing news stories about people taking out loans or mortgages to buy cryptocurrencies - probably a good time to get out.