WTF Is Happening With Crypto?!

The ETF Demand Shock 101

Hello, Investors,

We are almost at the ATH from the last bull market.

People I haven’t spoken to in years are sending me messages asking if they should still buy BTC.

Well, let’s explore that.

WTF is happening with crypto?!

We are 11% away from the previous ATH.

BTC is 11% from ATH

20% gain in 7 days.

All with a $1.2t market cap —> putting BTC right after Meta or above Buffet’s Berkshire.

That’s some crazy market right there.

2 weeks ago I wrote that it’s not too late to invest.

And the only constant is people asking “Should I buy BTC now?”

That’s not the right question.

They should ask - “Why do I want to buy BTC?”

  • If you want to get rich overnight, then it's too late and there are better assets in Web3 space for that.

  • If you want to hold until the next bull market (~7 years), it’s still a good price, and set up your DCA strategy for the long run.

  • If you want to get decent returns in this bull market, then align your expectations. It’s too late to get 10x returns and probably too late to get 5x as well. However, it’s still time to make 2x with pretty low risk.

I believe BTC will cross the 100k mark in this bull market and I’m confident in buying more with that in mind.

I even agree with the consensus around the $140-$170k ATH target.

Why is that?

  1. ETFs

  2. Macro

ETFs - Demand Shock 101

We discussed Macro 2 weeks ago here, and that remains.

For the ETF part, that’s where the short-term magic is happening.

BTC ETF Inflows tracker

In the last 2 days, we saw a net inflow of over $500m.

That’s nice and you probably know about it already, but what does it really mean?

Every day miners “create” ~900 BTC. That’s the supply side.

Now let’s change the chart and see how much BTC these funds buy daily.

BTC ETFs Daily Inflows in BTC

Yes, ETFs buy daily 5-14x more BTC than it’s created.

That’s a demand shock in action.

These shocks are typically short-term and we expected this to happen in the first days.

However, there is an interesting flywheel:

Launch BTC ETF > number go up > creates more demand > more buying of ETF > number go up > creates more demand > more buying of ETF …

Now imagine we are still 52 days away from halving - the long-anticipated supply shock.

To sum up, the party is already in full swing, but we are far from the 2 am last call.

My 2 cents

While still buying BTC, it’s time to shift into altcoins to get the juicy rewards - I’m not selling yet, just buying less BTC and more alts.

2 weeks ago I mentioned BRC-20 and opened some positions.

These skyrocketed and the TVL on Bitcoin attacked $2bn thanks to BTC L2 project Merlin (s).

I did a deep dive into DePin, opened some positions as well and it also made nice gains.

Unfortunately, I didn’t write about it, so this one is on me.

I still want to explore more derivatives trading platforms and RWA candidates.

I’ll try to share it sooner so you don’t miss the train.

Why Invest In Crypto?

If you follow this newsletter, you probably read it already.

If not, here’s the dive into “Why invest in crypto?

It feels funny since we are back in the crazy hype bull market, but when I started creating this piece BTC was sitting at 20k… Feels like a different century.

it took Nasdaq 15 years to recover from the dot-com crash.

BTC can crash and recover in 4-year cycles.

Speaking of timing,

→ Investing 1 year earlier = 35.08% p.a.

→ Investing 1 year later = 23.74% p.a.

→ DCA in the worst period = 9.13% p.a.

Full article at 👉 https://blog.metainvestor.gg/ 

Stay awesome,

Matt.

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