Bitcoin: Post-Halving Year

Introduction to Post-Halving Year Returns

The speaker discusses Bitcoin's post-halving year returns, comparing them to previous cycles. They analyze the patterns and trends in Bitcoin's price movements, particularly focusing on the post-halving years of 2013, 2017, and 2021.

Analysis of Previous Cycles

• 2013: A highly bullish year with significant growth.
• 2017: Started with a sell-off, then slowly went up later in the year.
• 2021: Bounced around before moving up in February.

Current Market and Predictions

The speaker notes that in post-halving years, there's often more volatility. They predict that Bitcoin might follow a similar pattern to previous years, potentially reaching $120,000 to $140,000 before fading into the third quarter. However, they also consider the possibility of a left-translated cycle due to factors like inflation or unemployment rate changes.

Managing Risk

The speaker emphasizes the importance of managing risk rather than trying to predict the market with certainty. They suggest having a majority of the crypto portfolio in Bitcoin, with some diversification into altcoins, and maintaining a cash reserve for buying dips.

Portfolio Management

Using modern portfolio theory and running Monte Carlo simulations, the speaker suggests an optimal portfolio allocation could be 83% Bitcoin, 17% Ethereum to maximize the Sortino ratio. Adding USD to the calculation suggests 58% Bitcoin, 12% Ethereum, and 30% cash for maximizing the Sortino ratio, emphasizing the need for a cash contingency.

Conclusion

The speaker concludes by highlighting the uncertainty of the market and the importance of having a plan. They anticipate that regardless of whether Bitcoin experiences a right-translated or left-translated cycle, it could still be around current prices by the third quarter of the year, with the main difference being whether it reaches that level by going up or coming down.