The Wolf Den #949 - Are We Early Or Late?
The middle...
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In This Issue:
Are We Early Or Late?
The Mango Markets Case Is Closed
Tether Is Expanding
Don’t Look At These Predictions
Are We Early Or Late?
One of the most pressing questions on every investor's mind is this: Are we in the early or late stages of the bull cycle?
If we're early in the cycle, we can simply sit back and wait for prices to escalate significantly. If we're nearing the end, then, disappointingly, we might have to brace ourselves for a four-year wait, as our collective predictions have once again fallen short. If we're in the middle, things aren't too bad.
The challenge with these predictions is our notoriously poor track record at forecasting. Despite this, here I am, yet another commentator airing an opinion that might just end up embarrassing me - all for your entertainment.
This is what I feel like on the inside…
All jokes aside, I'm not entirely out of my mind. Today, I draw inspiration from Coinbase Institutional, under the leadership of my good friend David Duong, a regular guest on my show. His team is known for delivering some of the industry's most insightful research. Our confidence is further bolstered by Glassnode's partnership with Coinbase Institutional. So, without further ado... Are We Early Or Are We Late?
My theory, supported by the charts below, suggests we've transitioned from the 'early' to 'middle' stage during the recent rally. We're currently in a cooling-off period after a decisive price movement that marked our exit from the 'early' stage. This perspective is supported by several factors, which I will discuss in more detail. Importantly, we've yet to see the late-stage euphoria typically characterized by nation-state adoption, hyperbitcoinization, or a surge in companies adding Bitcoin to their balance sheets—events that are likely still on the horizon.
Before we proceed, take a moment to consider the following chart, which is crucial to understanding our current position. The text below, provided by Coinbase Institutional, describes the chart in detail.
BTC Price Performance Since Cycle Low
“Bitcoin has completed four cycles that each included both bull and bear markets. In this chart, we see how the current market cycle, which began in 2022, compares to the previous cycles.
In the current cycle, BTC is up 400%+ in the 17 months since its cycle low.
The current cycle most closely resembles the one from 2018-2022, which ended with BTC up 1,000% 24 months after the low.”
I visited Glass Node to locate this chart and interact with it to offer you more details. — it appears that this current cycle might conclude in October 2025. The last cycle featured a distinctive double top, but using the second, higher top as the endpoint aligns the duration of that bull market with its predecessor.
This observation supports a credible theory that these cycles are lengthening over time, suggesting a potentially extended duration for the current cycle. If we accept mid-October 2025 as the endpoint, then from the cycle's beginning in November 2022, it would last roughly 1,095 days, or just about three years.
As of today, April 19, 2024, we are 515 days into this cycle, which translates to about 47.03% of the cycle completed. Using a bit of rough estimation, and allowing for variability, the cycle's end could shift by up to 100 days either way. This could place the end date as early as July 14, 2025, or as late as January 30, 2026, altering the completion percentage to either 51.76% or 43.1%, respectively.
While these projections are speculative and hinge on October 2025 as the endpoint—rather than, say, February 2025 or some other month—they suggest that we are roughly at the halfway point of this cycle.
BTC Price Performance Since Halving
“This chart measures the total return of BTC during each of the Halving cycles, or epochs. Within 12 months following the prior three Halvings, the price appreciated meaningfully.
Following the first Halving (red line), prices gained more than 1,000% in the first 12 months.
Following the second Halving (blue line), prices gained 200% in the first 12 months.
Following the third Halving (green line), prices gained more than 600% in the first 12 months.”
You'll notice that this chart uniquely measures the cycle from one halving to the next, which explains why there isn’t a new line reflecting our current price trajectory. It deliberately overlooks the typical bull and bear market phases, yet these cycles are still perceptible within the data. Interestingly, the chart suggests that if you choose not to sell during this bull market but instead wait until the next halving—four years from now—you might find yourself roughly at the same position as this cycle’s peak, or possibly a bit lower. This comparison offers a fascinating perspective on where we currently stand relative to the peak of the last cycle.Bull Market Cycle Performance
“The current bull market cycle, which began in November 2022, has seen prices reach ~4x the lows.
As is seen in this chart, the two prior bull markets (2015-2017 and 2018-2021) saw prices rise 100x and 20x respectively.”
For this chart, I don’t see why the black line can’t push up to 8x and maybe a little higher. From the bottom ($15,787.28), an 8x multiplier takes BTC to $126,298.24. A 10x and 12x multiplier take BTC to $157,872.80 and $189,447.36, respectively.
Asset Class Performance
“Bitcoin has been the top performing asset in eight of the past 11 years. For three of the 11 years, bitcoin was the worst-performing asset. During the full time period from 2013 to 2023, it was also the top-performing asset, with annualized returns of 124%.”
Just had to share my favorite chart for dunking on tradfi boomers - don’t hate the player, hate the game.
ETH Price Performance Since Cycle Low
“Ether has completed two cycles that each included both bull and bear markets. In this chart, we see how the current market cycle, which began in 2022, compares to the previous cycles.
In the current cycle, ETH is up 200%+ in the 17 months since its cycle low.
The current cycle most closely resembles the one from 2018-2022, which saw ETH rise 400% 24 months after the low.”
What’s a research report without some insights into Ethereum?
The journey for Ethereum holders has been tough at the start of this cycle, but challenging periods often set the stage for remarkable recoveries. A key observation is that Ethereum typically starts off slow and finishes strong—it's more of a grower than a shower. We’re approaching the middle phase, which historically accounts for the bulk of Ethereum's gains. There's no need to worry, and neither should you.
This wraps up my thoughts on whether we are early or late in the cycle. My conclusion is that we're neither; we are solidly in the middle, and I'm confident in this assessment, supported both by gut feeling and by what the charts indicate. I’ve mentioned this repeatedly, but it bears repeating: the longer the cycle, the higher the potential ascent. So, sit tight, enjoy the upcoming halving, and take a breath. Bitcoin is poised to break $100,000, Ethereum will follow suit, and quality altcoins will likely see strong performance.
This weekend marks a crucial technical event for Bitcoin. Let’s take the time to celebrate Bitcoin and life itself. Wolf out.
*I will be back to full capacity on Monday.
The Mango Markets Case Is Closed
After going to trial, a jury decided that Avraham 'Avi' Eisenberg was guilty of commodities fraud, commodities manipulation, and wire fraud in October 2022. For those who don't recall, Mango Markets was a DEX built on Solana that allowed borrowing, lending, and trading. It was exploited for $110 million by a single individual who claimed to be using a "legal" trading strategy.
The exploit occurred when Avi deposited $5 million into the protocol and then opened an excessively large, long position, causing the price of the MANGO token to skyrocket by around 1,000%. This increased the exploiter's collateral value, enabling Avi to borrow a significant amount of tokens from Mango Markets without any intention of repaying them. While $67 million was returned, $47 million was retained following a governance vote. Fortunately, the jury saw through the assertion that this was merely a "winning trading strategy."
The sentencing has not been determined yet, but Avi could face up to 20 years in prison.
Tether Is Expanding
Yesterday, Tether announced a major reorganization plan to streamline the company into four separate subdivisions, each with its own distinct mission: Tether Data, Tether Finance, Tether Power, and Tether Edu. The Data division will concentrate on development and strategic investment opportunities, such as AI and peer-to-peer platforms. The Finance division will focus on USDT, while the Power division will oversee mining and energy operations. The Edu division will focus on global education. Tether's CEO, Paolo Ardoino, stated, "In regions across the globe, the name 'Tether' has become synonymous with financial freedom and empowerment."
“Thriving together is in our DNA. We disrupted the traditional financial landscape with the world’s first and most trusted stablecoin. Now, we’re daring to kickstart inclusive infrastructure solutions, dismantling traditional systems for fairness. With this evolution beyond our traditional stablecoin offerings, we are ready to build and support the invention and implementation of cutting-edge technology that removes the limitations of what’s possible in this world. We’re Tether. We use technology to empower individuals, communities, cities and nations to become self-sustainable, independent, and free. Be unstoppable, together.”
Don’t Look At These Predictions
You weren't supposed to look, but since you did, here's the scoop: PlanB predicts Bitcoin will hit $300,000 in 2025 and $100,000 in 2024. Adam Back believes Bitcoin will surpass gold this cycle, while Robert Kiyosaki sees $300,000 as a possibility this year. I won't delve into these predictions, but I will note that both the Stock-to-Flow (S2F) model and the Rainbow chart suggest we're more in the early stages than the late stages.
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The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this e-mail constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.
Now remember Scott that PlanB predicted BTC to hit $100,000 in 2021. It may finally reach $100,000 this year, but I'm not relying on his $300K price prediction for 2025.
Good stuff Scott. Appreciate the encouraging report.