F*ck! Did Crypto Top Already?

Lark Davis

Introduction to the Crypto Market Discussion

The speaker discusses the current state of the crypto market, addressing fears that the crypto cycle is over and that it's time to sell. They argue against this notion, believing that the best days of the market are ahead.

Seasonality of January

The speaker examines the seasonality of January in the crypto market, particularly following an election year. They highlight:

  • A historical rally in January 2017, followed by a correction and then a significant uptrend.
  • A similar pattern in 2021, with an early January rally, a correction, and then a substantial increase in price.
  • The importance of March and April as months to watch, with potential for high volatility.

Market Fears and Validity

The speaker addresses several market fears:

  1. Fed Hawkishness: The fear that the Fed's interest rate policy will negatively impact the market. However, the speaker notes that markets have historically performed well on high interest rates.
  2. Inflation: Concerns about inflation are valid, but the speaker believes that inflation might not spike as high as feared, and the Fed has tools to manage it.
  3. Tariffs: The potential for tariffs to cause inflation. The speaker suggests that the impact of tariffs might be overestimated and that negotiations will reduce their effect.
  4. Dollar Strength: The strong dollar is currently bad for risk assets, but the speaker notes that a weaker dollar, which could be facilitated by Trump's policies, would be beneficial.
  5. China's Economic Issues: While China's economy is facing challenges, the speaker argues that China's disinflation could have a disafflationary effect on the U.S., potentially giving the Fed room to cut rates.

Positive Indicators

The speaker mentions several positive indicators for the market:

  • The potential for quantitative easing and an increase in liquidity.
  • The appointment of pro-crypto individuals to key positions, which could lead to more favorable crypto policies.
  • The approval of alt-coin ETFs, which could bring more investment into the crypto space.

Conclusion

The speaker concludes that while macro fears are present, they believe the best days of the market are ahead, driven by factors like AI growth, increased liquidity, and potentially favorable crypto policies. They emphasize the importance of taking profits during market pumps to prepare for potential downturns.