Bear markets are hard.
Bitcoin’s price is the same today as it was one year ago. The S&P 500 is down 6% over that time.
Some people say “friends don’t let friends buy altcoins during bear markets.”
If anything, friends shouldn’t let friends buy altcoins during bull markets. That’s when you lose money.
I would say buy altcoins whenever you feel like it. Just try to hold yourself to small purchases when the market’s hot and try to force yourself to keep putting money in during times like these, as best you can, at a pace that feels comfortable to you.
Listen to my thoughts and observations in the May 19, 2022 altcoin update.
With our most recent lower-low on the high timeframe trading charts, bitcoin confirmed it spent the past six months in a bear market. I’m not calling for a bottom—the bottom is $0—but if history is our guide, the bear market’s either over or gearing up for one last crash.
Get my update from May 17, 2022, and you’ll see why.
Yes, it’s possible we just finished a six-month bear market with a bottom at $25,500. We’ll need to wait at least a few more months before anybody can say with any confidence, but if it’s true, that would seem crazy. Can you have a bear market that lasts only six months? And only drop bitcoin’s price 60% from the peak to the (very brief) bottom?
But for this market, everything is crazy. In April, I wrote this article summing up my thoughts:
Scroll down for a poll and some content you may enjoy. Also, please note I removed Celsius from my list of crypto savings platforms until they share more information about their exposure to UST and their relationship with Tether.
Poll: At which of these bitcoin prices will you buy more crypto?
Melvin Capital to shut after heavy losses on meme stocks, market slump
Bottom line: after outperforming for years, a well-known investment company shut down because of a few bad bets.
My take: one Wall Street firm lost more money on “real businesses with intrinsic value” than the entire crypto market lost on LUNA/UST. Sucks for everybody, but a reminder that crypto is not the only cruel, speculative, risky market. I’m guessing Melvin Capital’s founder thought it’d be easier to give up and start over than to fix the fund and rebuild. Sounds familiar.
Why we care: these things happen in all markets, not just crypto. We’ve had hundreds of Melvin Capitals over the years and we’ll probably get many more in the coming years. Sometimes people try their best and fail. That’s different than scheming to rip you off and take your money.
Sticking with the theme of “the US stock market will drag down crypto,” listen to a recent episode of the On the Margin podcast. This episode, Fed Wants to Crash the Stock Market, touches on inflation and US central bank policy.
Frankly, I’d worry a lot more about corporate and sovereign debt than inflation and interest rates (though they’re related). This episode touches on those topics, too.
Wall Street Isn’t Ready for the Crackdown Coming Its Way
Bottom line: US regulators are stepping up investigations of insider trading, market manipulation, collusion, and the practices of SPACs.
My take: you thought they only cared about that stuff when it happens in crypto? As shady as crypto can be, it’s probably not any worse than the legacy financial system.
Why we care: because people get down about crypto and forget how screwed up Wall Street is. As global regulators develop frameworks for crypto, ask whether they’re targeting crypto itself or the people who use crypto to do bad things to you.
One meme for your week.
Relax and enjoy the ride!
Weekly Rundown - May 22, 2022