Why the Upcoming Web3 and Crypto Mega Bull Run Will Catch Everyone off Guard

🌈 Abstract

The article discusses the current state of the cryptocurrency market, particularly Bitcoin, and why the author believes we are on the cusp of a historic bull run in Web3 and crypto. The key points covered include:

• We are still in the early adoption phase of Bitcoin and blockchain technology, similar to the early days of tech giants like Apple and Microsoft.
• Cryptocurrency market cycles are highly predictable, with a clear 4-year pattern that suggests we are nearing another bull run.
• Upcoming US presidential election years and potential Federal Reserve rate cuts could provide catalysts for a crypto bull run.
• The 18.6-year real estate cycle suggests we are in the "winner's curse" phase, which could lead to a euphoric bull run before a potential recession.

🙋 Q&A

[01] We are still early Bitcoin adopters

1. What evidence does the article provide to suggest we are still in the early adoption phase of Bitcoin and blockchain technology?

• The article cites a Coinbase survey that shows only about 20% of American adults own cryptocurrency, indicating we are still in the early adopter phase, similar to the adoption of personal computers in the 1990s.
• The article also notes that investing in blockchain technology today is comparable to investing in tech giants like Apple, Microsoft, or IBM during their early days, or being an early investor in platforms like Meta, Twitter, and LinkedIn before 2010.

2. What lessons does the article suggest investors should keep in mind when making crypto investment decisions?

• The article cautions that just as some companies like WorldCom, NorthPoint Communications, and Pets.com failed during the tech boom, not every crypto investment will succeed. This highlights the high-risk, high-reward nature of the crypto market, and the importance of being mindful of these lessons when making investment decisions.

[02] Cryptocurrency cycles are predictable

1. What pattern does the article identify in the Bitcoin and cryptocurrency market cycles?

• The article explains that Bitcoin and the entire cryptocurrency market go through a clear four-year cycle, with Bitcoin's price peaking, then declining for a couple of years, and then rising sharply after the next halving event (when the reward for mining new Bitcoins is cut in half).
• The article provides examples of this pattern occurring in the 2013, 2017, and 2021 cycles.

2. Why does the article suggest that most people fail to capitalize on these predictable cycles?

• The article states that investing is a game of emotions, where people get greedy during bull runs and fearful near the bottom. Smart investors buy during the bear phase, while most only start investing later, when they should be taking profits.

[03] Upcoming US presidential election year and Fed rate cuts

1. What historical data does the article cite regarding the performance of the S&P 500 during US presidential election years?

• The article states that since 1928, the S&P 500 has only delivered negative returns in four election years, and has been positive 83% of the time, with an average gain of ~11%+.
• The article also notes that the S&P 500 has never had negative returns in an election year following a negative midterm year, and only once since 1932 in an election year.

2. How does the article suggest these trends in the broader markets could impact the cryptocurrency and Web3 markets?

• The article states that as traditional markets surge during election years, Bitcoin and the broader crypto/Web3 markets tend to follow, as these highly volatile assets often see much more significant pumps.

3. What impact does the article expect the upcoming Federal Reserve rate cuts to have on the cryptocurrency market?

• The article suggests that the expected Fed rate cuts could be a major catalyst for Bitcoin, as lower interest rates typically increase liquidity in the market, encouraging spending and investment. This influx of liquidity could drive investors toward riskier assets like Bitcoin and other altcoins, leading to price increases.

[04] The 18.6-year real estate cycle

1. What is the 18.6-year real estate cycle, and how does the article suggest it is relevant to the current market conditions?

• The article explains the 18.6-year real estate cycle, which suggests that real estate markets experience a predictable pattern of booms and busts every 18.6 years, driven by long-term economic and demographic factors.
• The article states that according to this cycle, we are now in the "winner's curse" phase, where the market seems to be going up despite rising recession fears and global conflicts. The article suggests that this phase will be followed by a euphoric bull run, before a potential recession begins.

2. How does the article suggest the 18.6-year real estate cycle could impact the cryptocurrency and Web3 markets?

• The article argues that until the upcoming recession begins, markets will continue to climb, leading to a euphoric bull run in Bitcoin and the broader cryptocurrency market.

[05] Closing thoughts

1. What does the article suggest investors should do before investing in any crypto token?

• The article provides several steps investors should take, including researching the project's purpose, technology, team, and investor profile; evaluating the whitepaper; understanding regulatory risks; and reviewing community feedback.

2. What is the overall message the article conveys about the current state of the cryptocurrency market and its future potential?

• Despite the skepticism following the 2022 crash, the article believes we are at the cusp of a historic bull run in Web3 and crypto, driven by factors such as continued early adoption, predictable market cycles, upcoming US election year and Fed rate cuts, and the 18.6-year real estate cycle. However, the article cautions readers to conduct thorough research and not to invest in anything they don't understand.