Crypto: cycle debate echoes 2018
In a forum, traders compare the crypto slump to 2018: some have liquidated positions on gut feeling, others are holding on, and some believe the crash will be worse.
English · Original discussion in Spanish · Published
Crypto: cycle debate echoes 2018
It feels just like January 2018. First you think you're Relleniton Gekko; then, by April, you're a poor sucker. That is the diagnosis running through conversations about the cryptocurrency crash, and not out of nostalgia: those who lived through the last crypto winter recognize the pattern. One participant argues that many investors who had only ever seen their portfolio go up refuse to accept that the market has changed cycle, clinging to the same old "HODL at all costs" mantra as back then.
The problem isn't optimism. It's amnesia. Anyone who has seen a 10x and a 20x but has never lost 97% of their capital from the peak hasn't seen anything, according to that same participant, and that is exactly what, in his view, peine to altcoins in 2018: the ones that were going to revolutionize everything lost nearly 98% from their highs. The warning circulates with a smirk among those who have already been through it: some will learn the hard way, maybe not now, but it will happen to them.
From January euphoria to April panic
The timeline of the last major cycle serves as a mirror. In January 2018 the average investor felt like Relleniton Gekko; by April, the same person saw themselves as a nobody with their Blockfolio in the red. The comparison is not gratuitous: some have liquidated all their positions and moved into stablecoins precisely because the market's behavior reminded them too much of those feelings. Even projects with their own appeal —IOTA staking, for example— haven't escaped the burn.
Against that orderly exit, another group is holding on. Half the portfolio in risk assets and the other half in liquidity, hoping someone will bail out the whole thing. It's the classic bet of the one who doesn't want to miss the rebound. The clash between the two stances —selling to preserve or holding out of conviction— defines this phase of the market better than any chart.
The problem with altcoins: they don't have bitcoin's uptime
The sharpest criticism isn't about price, but about the nature of the assets. Bitcoin has run like clockwork for thirteen years, just as the TCP/IP protocol has been running without a hitch for forty years, according to one participant. Altcoins, by contrast, don't offer that continuity. It's the argument of those who prefer boring, proven infrastructure over the experiment with a pretty logo, and it explains why many look with disdain at the rest of the market after every correction.
Valuation indicators don't help clear up doubts either. Tools like the MVRV Z-Score, which compare market value with realized value, put the zones of August and December 2017 almost on a par even though prices were very different, according to one user. That kind of signal has unsettled even those who have been reading charts for years, because this cycle hasn't reproduced the pattern of previous ones and leaves you without a compass when deciding what to do with secondary positions.
The macro factor: interest rates and red markets
The fall can't be explained within the crypto ecosystem alone. The Federal Reserve is planning three rate hikes in 2022 to cool inflation, and that shift tightens conditions for all risk assets. Stock markets are also plummeting, and some are watching months of accumulated returns evaporate in weeks simply from having scaled in gradually: the bigger the position, the more what's left to lose hurts.
The bitterest reading is that the party ended because of the change in monetary policy, not because of an internal protocol failure. And that leaves investors with an uncomfortable question: if cheap money propped up part of the price, what's left when it stops flowing?
The salvation narrative and the scam narrative
At the opposite extreme, the total-collapse thesis is gaining trinc. Some argue the crash will be worse than 2018's, and others outright compare the market to a Ponzi scheme, arguing that there are always more people losing than winning. It's not a fringe position: the idea that the chickens coming in pay for those going out runs through much of the skepticism.
There are also those who point out that denying many people have made money with bitcoin is foolish, even if it's within a scheme where the majority loses. The discussion, at its core, isn't about technology: it's about who pays for the party when the lights go out.
The most repeated prediction points to a rebound in March. Whether the one saying it will still be in to tell the tale is another matter. With the 2018 precedent on the table, anyone who hasn't yet seen 97% of their portfolio wiped out still has a lesson pending, and the market rarely gives free classes.
It feels just like January 2018. First you think you're Relleniton Gekko; then, by April, you're a poor sucker. That is the diagnosis running through conversations about the cryptocurrency crash, and not out of nostalgia: those who lived through the last crypto winter recognize the pattern. One participant argues that many investors who had only ever seen their portfolio go up refuse to accept that the market has changed cycle, clinging to the same old "HODL at all costs" mantra as back then.
The problem isn't optimism. It's amnesia. Anyone who has seen a 10x and a 20x but has never lost 97% of their capital from the peak hasn't seen anything, according to that same participant, and that is exactly what, in his view, peine to altcoins in 2018: the ones that were going to revolutionize everything lost nearly 98% from their highs. The warning circulates with a smirk among those who have already been through it: some will learn the hard way, maybe not now, but it will happen to them.
From January euphoria to April panic
The timeline of the last major cycle serves as a mirror. In January 2018 the average investor felt like Relleniton Gekko; by April, the same person saw themselves as a nobody with their Blockfolio in the red. The comparison is not gratuitous: some have liquidated all their positions and moved into stablecoins precisely because the market's behavior reminded them too much of those feelings. Even projects with their own appeal —IOTA staking, for example— haven't escaped the burn.
Against that orderly exit, another group is holding on. Half the portfolio in risk assets and the other half in liquidity, hoping someone will bail out the whole thing. It's the classic bet of the one who doesn't want to miss the rebound. The clash between the two stances —selling to preserve or holding out of conviction— defines this phase of the market better than any chart.
The problem with altcoins: they don't have bitcoin's uptime
The sharpest criticism isn't about price, but about the nature of the assets. Bitcoin has run like clockwork for thirteen years, just as the TCP/IP protocol has been running without a hitch for forty years, according to one participant. Altcoins, by contrast, don't offer that continuity. It's the argument of those who prefer boring, proven infrastructure over the experiment with a pretty logo, and it explains why many look with disdain at the rest of the market after every correction.
Valuation indicators don't help clear up doubts either. Tools like the MVRV Z-Score, which compare market value with realized value, put the zones of August and December 2017 almost on a par even though prices were very different, according to one user. That kind of signal has unsettled even those who have been reading charts for years, because this cycle hasn't reproduced the pattern of previous ones and leaves you without a compass when deciding what to do with secondary positions.
The macro factor: interest rates and red markets
The fall can't be explained within the crypto ecosystem alone. The Federal Reserve is planning three rate hikes in 2022 to cool inflation, and that shift tightens conditions for all risk assets. Stock markets are also plummeting, and some are watching months of accumulated returns evaporate in weeks simply from having scaled in gradually: the bigger the position, the more what's left to lose hurts.
The bitterest reading is that the party ended because of the change in monetary policy, not because of an internal protocol failure. And that leaves investors with an uncomfortable question: if cheap money propped up part of the price, what's left when it stops flowing?
The salvation narrative and the scam narrative
At the opposite extreme, the total-collapse thesis is gaining trinc. Some argue the crash will be worse than 2018's, and others outright compare the market to a Ponzi scheme, arguing that there are always more people losing than winning. It's not a fringe position: the idea that the chickens coming in pay for those going out runs through much of the skepticism.
There are also those who point out that denying many people have made money with bitcoin is foolish, even if it's within a scheme where the majority loses. The discussion, at its core, isn't about technology: it's about who pays for the party when the lights go out.
The most repeated prediction points to a rebound in March. Whether the one saying it will still be in to tell the tale is another matter. With the 2018 precedent on the table, anyone who hasn't yet seen 97% of their portfolio wiped out still has a lesson pending, and the market rarely gives free classes.
Also available in: Deutsch
Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (38 replies).
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