I believe every generation has its rock and roll. For old Boomers it was rock and roll, for young Boomers and GenX it was computers, then the next generation got Nintendo, then it was the internet, then it was social media, now this cohort’s rock and roll is crypto.
I’m amazed to say it but I still meet a lot of people that poo-poo bitcoin and crypto in general. I find that pretty weird at this stage in proceedings. This is not 2013. However the current crash-in-progress is bringing out the no-coiners to gloat as if equities are somehow obviously the only game to play with investing.
It’s as if they don’t see the Nasdaq in mid-crash, having already dropped several multiples of wealth more than the whole crypto space is worth in total.
Equity believers have to be a hard core buy the dippers to not acknowledge this is one frightening chart with a trajectory aiming at 10,000 and probably lower. A grumbling no-stocker could easily imagine 5,000 and you may start hearing that if the Nasdaq gets under 10,000.
But here is a different perspective.
Crypto is Nasdaq 1978, maybe 1980. Get in that time machine and take a look.
This is where crypto is: it is still emergent, even though some 10-plus years is enough for a revolutionary market to somehow mature.
Of course plenty of people were mocking technology investors back then when the market crashed, even strong tech believers did not see it turning the world quite so upside down. For how many years was the dotcom boom considered a horrific joke when Nasdaq hit 5,000 then fell to 1,100 and didn’t clear that low till 2010?
The crypto markets will continue to crash and likewise so will the Nasdaq but there will be a big new generation hardened by the crypto boom crash cycle that will rotate into equities in due course. What is good for equities is good for crypto and vice versa, and that is the key to this crash.
The Fed is going to try to kill inflation by crimping the stock market and giving money supply and you and me a haircut via our assets. A haircut is one thing, a decapitation is another.
That is why I don’t think we will see much lower than 10,000. The Fed can stop the fall at the flick of a switch but it will only do so when it thinks it has inflation at its optimal level. Crypto, on the other hand, has no such “Fed put.”
Yet like stocks, it is a market set to fly after the cycle has completed and the bargains are coming, it’s just a matter of when.