Ending 2021, The Prelude Year To The Crypto SuperCycle
A look back to my previous article and now we are coming to the end of 2021. The journey has got me heartened.
We have come a long way from uncertainty, fear, and doubt. This year, we experienced a series of all-time highs for Bitcoin, Ethereum, and many other coins. Also, not forgetting the rise of DeFi, NFT, GameFi, etc. New terminologies such as Metaverse have also been entering the picture, where now builders are working hard to make this idea into reality.
I just spent 20 minutes illustrating the picture below just to realize that I am a terrible artist.
During a bear market, I like to draw technical charts to give my readers a sense of when the bear market is going to end, which is pretty much what I am looking forward to most of the time.
Since we are at the bull market, I am going to do something different. I am going to talk about some concepts that are embedded in my mind and share some thought processes.
What attracts the most on crypto is Alpha. When it comes to an investing portfolio concept, one thing stands out the most — Alpha. When I chanced upon this word, I knew that this was going to be my edge and that it was going to make a difference in my own financial life.
Seeking the alpha was hard until I chanced upon Crypto. I knew that it was the golden opportunity in my life, I was neither early to the game nor too late. I was just in the sweet spot in early 2017 where the Bitcoin was entering its acceleration and first mass-market awareness phase while Ethereum was rising to bring blockchain adoption to the next level.
Back then, if we could use a rising diagonal line to describe the price appreciation on coins like Bitcoin and Ethereum in a normalized way, the sine wave around it is the reality, with fluctuating percentage price changes up and down.
The differences between the rising diagonal line and the sine wave represent the delta.
The delta evolve on the rising asset is huge, the delta difference is big. There were so many opportunities to maximize the delta.
Putting aside that, even if you don’t do anything, as long you entered the market early, the upsides are huge. The “ALPHA” is not just good, it is great, much better than all other assets. You could even say it is the best to chance upon.
With the rise of Bitcoin comes many other coins that want to be an improvement of it, such as Litecoin, Ripple, Stellar Lumen and even the Ethereum asset class. This gives rise to a new category of asset class — Cryptocurrency.
Fun fact:
The emerging theory of what is a good alpha and if it lives up to its legacy, is what is defined as The Best Alpha.
We can revisit the charts using Bitcoin or Ethereum as an example. Their delta difference is huge, with high alpha in the beginning. Just like all the NYSE/NASDAQ blue-chip stocks when entering trillion dollars market capitalization, they become more like a Beta-play rather than an alpha-play. However, crucial to the evolution of any asset class, there first needs to be an evolution of industry maturity and an adoption progression.
The story does not end here, as this is just the beginning. There will always be the next Bitcoin, the next Ethereum, and even the next protocol, or a better version of Bitcoin and Ethereum combined.
The D.
The technology that is going to be a blockchain enabler, where they are changing Layer 0.
However, we are not going there today.
We are going to take a step back and discuss all the above in an analogy format.
This is the first maze.
The alpha seeker has finished this maze, so the maze changes its theme. However, the walkthrough is still the same. The time taken to complete the maze is going to be faster and fasterrrrr.
The alpha will always be there, but the realisation of alpha is getting faster. The only question is,
Where?
When all the alpha are establishing fast and multiplying in a collective manner, where alpha seekers are performing re-looping, a cycle will be formed.
We call it super-cycle.
To enable a super-cycle, there is one crucial factor that has always been on everyone’s lips from 3 -4 years ago, but still fails to happen.
Utility.
Now, we have DeFi, NFT, GameFi and the Metaverse, i.e. The Four Horsemen.
The gaming industry is worth almost 340 Billion (based on industy revenue) in 2021.
The Collectible industry is worth almost 400 Billion in year 2021.
All of the above are expected to multiply by 5 times of their value in 3 years time.
All of these immense amounts of value are going through a tokenization ritual. Where we are not talking about 3 years. It might take just the next 3 to 6 months.
Can cryptocurrency market cap double or quadruple in 2022 with all these utilities come into play? I bet so.
Then we come into this WAGMI (We are all going to make it) theory (3,3)
The word “stake” can replace the words of “buy” or “invest” too.
So we are going to enter a long period of (3,3).
Everything appears like a small dot if you are looking ahead now.
Let us look back again after 1 year and you will notice that all the dots are forming a straight line.
There is this saying,
The future is already here — It’s just not very evenly distributed.
Happy New Year and See You All In 2022!
