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❄️ The 4 seasons of crypto
PLUS: Microstrategy buys more bitcoin & FOX on the dollar
Alex M.
March 28, 2023
🧙♂️
GM everyone. This is 2036, the crypto newsletter that pays you 💸
We’ve had a great start to the year in crypto. If you own bitcoin, congratulations. You’re up 66% to date.
But things might get a whole lot better soon.
So if you missed the last few months of bitcoin, this one is for you.
You sure?
Let me channel my inner Vivaldi and show you.
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Just like there are seasons to life, there are seasons to crypto.
And each season offers us different opportunities to make money.
Luckily for us, the seasons of crypto are well-known. So let’s start from the beginning.
1/ Spring 🌱
First, bitcoin goes up in price.
This move is typically driven by:
the business cycle
the bitcoin halving cycle (which happens every 4 years, in which the bitcoin mining rewards are halved)
a sudden loss of faith in the financial system (sounds…relevant?)
… meaning that before anything else, investors buy bitcoin. That’s spring.
To get a pulse on the crypto markets, that’s the coin we look at. The OG. The godfather of all coins. The one coin to rule them all.
So bitcoin goes first. But Ethereum quickly follows suit.
That’s summer.
2/ Summer 🌻
We enter summer when Ethereum starts outperforming bitcoin.
We’re not fully there yet.
Year-to-date, bitcoin is up 66%, but Ethereum is ‘only’ up 45%.
Ethereum (ETH) has been lagging relative to bitcoin.
But that will eventually change. Ethereum has an upgrade coming soon and is the natural next step in the season.
Ethereum won’t be alone in outperforming bitcoin, by the way.
In the later stages of summer, other foundational blockchains (called Layer 1s) like Avalanche ($AVAX), Solana ($SOL), Fantom ($FTM), $NEAR and new protocols that we don’t know yet start shining too.
They all pump together.
So people hear about these ‘new coins’ pumping and enter the space. FOMO kicks in, and that leads us to fall.
3/ Fall 🍂
Fall is when all hell breaks loose. In crypto, fall is also called AltSeason i.e. the season of alternative coins.
Every coin under the sun pumps to the moon.
18-year-olds in their mum’s basements make millions flipping NFTs and pictures of rocks.
Memes and scams go viral left and right, and random coins are built and pumped overnight.
Elon Musks tweets about Dogecoin from his bathroom and mints millionaires every day.
Everyone is talking about:
the color of their upcoming Lamborghini
when they’re moving to Dubai
It’s the wild west—the gold rush of the 21st century. Crypto goes up 30% in one day. Then 35% the next.
But everybody forgets to take profits.
And just like in life, when everything seems almost too good, a cold chill sweeps the market.
4/ Winter ❄️
Crypto struggles to break new all-time highs.
And then, for the first time in months, it ends the week lower than the previous week.
Crypto veterans feel the chill of winter coming and sell.
crypto OGs when they know that winter is coming
After that, winter comes faster than white walkers. In just a few days, the entire crypto market loses 50% of its value.
Then another 40%.
Hundreds of shitcoins go to 0.
In the span of weeks, trillions of market capitalization are wiped out.
Most people get emotionally burned and leave the space altogether.
The market chugs sideways for 1-3 years. Crypto Twitter goes silent.
Crypto founders get arrested in Montenegro with two fake passports and 5 phones. Others get accused of sex trafficking.
Winter is here. And it’s brutal.
A couple of people stick around north of the wall. They pick up bitcoin and Ethereum at multi-year lows.
But most people go south to warmer pastures where things aren’t as bad - like in real estate or stocks.
They’ll forget that bitcoin is an epochal technological breakthrough.
That bitcoin is digital gold, and Ethereum, the native currency of the internet.
They’ll believe the stories that “CRYPTO IS DEAD.”
That it was a scam all along.
But they’ll come back in summer when it’s hot again. To try and time and time the markets.
To “wait until it comes back down again to buy” to ease the pain of their FOMO as bitcoin rose from the ashes in the spring.
But they’ll make the same mistakes as before.
They’ll ignore bitcoin and Ethereum in favor of shitcoins - because they will “moon” faster and make them a “millionaire in this bull market.”
And they’ll end up losing it all again.
And as such, Simba, the cycle repeats, and we are all connected in the great circle of Life.
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