1/ # 1.4.3 Brief history of crypto alts and why bear markets and cycles are BS

Within crypto there are many concepts and ideas that are repeated or presented as fact that are not. One of these is the idea of market wide bear markets and cycles.

2/ It is total BS skewed to manipulate or comes from a lack of understanding of how technologies emerge.

In this section I'm going to start with an ELI5 on the crypto market.

3/ In crypto the idea is shilled that the 2017 run was just like all prior 'cycles' before it, the same with the bear market that followed it. They then use this supposed pattern to make a claim that another bear like it will happen again.

4/ You'll see some people having the idea that since mid 2020 weve been in a 'bull cycle' and soon it ends and we go into a bear market for x years followed by another bull. It's dumb. If you read and understand this thread you'll understand why.

5/ To understand why you need to understand how crypto changed in 2017 and why the 18-19 bear market happened.

2013-17 $BTC ran through a sequence of speculative bubbles. It had a near total dominance of crypto (90%+). It's all that was relevant.

6/ Its mechanics as a store of value and speculation on it was everything. There was no utility of crypto. In 2017 the situation changed with the ICO era. What most of us here do in crypto involves crypto alts. When looking at crypto in this way you may aswell forget pre 2017.

7/ It isnt comparable because at this point the game changed. The crypto industry in its current form that you see today began at this point.

8/ In 2016/17 a lot of people (mostly in marketing and shadey areas of businesses) discovered crypto and realized they could "make it" by just creating a company, a whitepaper, and doing an ICO. Most had no substance, no product.

9/ Just plans, and dumb nerds would buy it to speculative on. They were mostly nothing but BS. Their entire business plan was "Do a successful ICO". They "made it" when the sale completed. They didn't need the project to succeed. The level of junk exceeded anything you see today.

10/ Everything and anything was created with "X on the blockchain", despite absolutely no use-case being present and the teams not even having any developers.

11/ Even many of the solid projects you see today such as @Polkadot which did its ICO in this era were years from being ready.

12/ Today if a project does a sale, unless it has a live product launching soon, adoption happening, then it isn't going to do well wheras 2017/18 was an ecosystem of whitepapers and BS. Back then the average crypto investor was also a lot dumber.

13/ Back then explaining to someone that tokens were not equal to stock was like telling someone the earth was flat. They were buying the next Google/Microsoft and there was no doubt about it.

Tokens would pump x's just from vague meaningless "partnerships".

14/ Of course none of us minded. When these projects/ICOs launched, we all bought and shilled each other. As $BTC pumped retail entered from the exposure.

15/ They then found that they'd missed the huge x's on BTC and then went into alts instead and a gigantic speculative alt bubble began. Crypto was like a huge gas giant with no core, expanding on the promise of one day being solid.

16/ When FUD hit bitcoin in 2018 there was nothing to hold this market up. It was all either junk or years from being ready. It all collapsed over 6-9 months. Nobody saw buying opportunity in the prices because even on the good stuff there was nothing coming anytime soon.

17/ Alts had no utility, no foundation. Even $ETH which had 99%+ of the adoption had only dying junk running on it.

The crash of 2018 was crypto's dotcom crash moment.

18/ Both happened for the same reasons: Money entering a mostly speculative market, that the investors didn't understand, in a tech that wasn't ready to meet the shill.

19/ Just as how in the early to mid 2000's from the ashes of the speculative tech crash, the tech infrastructure and giants we see today emerged as the market began to mature, around Spring 2020 Crypto had a similar moment begin.

20/ As the development of the 2017-18 solid projects and infrastructure began to make ground and launch ( such as oracles like $LINK ) the first significant utility began as "DeFi" came through. Using the prior analogy: In our now deflated gas giant, a small solid core appeared.

21/ Crypto was no longer just hot air with the promise of solid core. It had a solid core and the shill changed to that core expanding.

22/ Since May 2020 to now that situation has exploded significantly, with more utility and crucially the infrastructure coming through to support that utility. Projects like $DOT $AVAX $NEAR $MATIC $LUNA.

23/ We have NFT technology which is going to probably be as big as DeFi if not bigger (When I refer to this I am not talking about trading crappy JPGs for millions). We have gaming, metaverse, identity and various other emerging areas.

24/ Crypto is being invested in at an incredible rate with billions of dollars coming in and building on this infrastructure. Many people see the amount of crap in crypto and mistakenly think its all still junk. Is crypto still very speculative? Sure.

25/ But to continue the gas giant analogy - the solid core is growing. Growing fast.

As that core grows, so does the bubble of gas and BS that surrounds it. Every news story, event and development of that core is seized by the BS to speculate further.

26/ The bigger the 'solid core', the more junk we get. You will see this over and over in crypto.

$AVAX explodes as its ecosystem gains adoption and what happens then?

27/ a load of junk L1s with no adoption and their community begin a BS campaign to shill everyone that their the next AVAX. It often works.

It explodes in price.. but its just hot air with little substance that quickly corrects down on a crash.

28/ This is how you need to think of a crypto. A rapidly growing and changing core of 'fundamentally' solid tech/projects, surrounded by a mass of BS that tries to profit/get gains using that core by knowingly/unknowingly suckering in investors who don't know better.

29/ This is why I say there is not going to be another market wide 2018 bear market.

30/ As I mentioned in the previous sections, in the adoption era the junk will absolutely crash with prices correcting down to metric driven prices instead of primarily speculative ones and we'll have low volatility that makes the types of gains we see now a thing of the past.

31/ However, its not all collapsing to nothing. The conditions for it no longer exist. For the same reasons there was never another DOTCOM crash. The market changed from purely speculative, to one with emerging utility and opportunity.

32/ If Amazon plunged tomorrow by a huge percent, people would seize the opportunity and buy. Why? Because its a tech giant with billions in revenue and is crucial to the global internet which everyone is still using.

33/ Likewise (on a much smaller more emerging scale), if $DOT crashes to $10 what happens?

34/ the same as happened in July - people see opportunity and buy because they know the token is needed for a parachain slot to run their app and has huge levels of ongoing adoption that will only increase this further of the coming years.

35/ Now in Q4 2021 you can go through countless solid projects and see similar situations of increasing utility.

In 2018 this didn't exist. There was no opportunity.

This is all evident by how the market has moved since May 2020.

36/ In the summer of 2020 we had the "DeFi summer" - Some DeFi protocols coming through getting gains.. along with a huge mass of complete degenerate junk degen projects, rugs, crap. Speculation got out of control and finally in September 2020 we had a collapse.

37/ If it was 2017-18 that would have been it for years. Many assumed based on past experience it was. But it didn't end.. within months as prices crossed into the terrain of opportunity on the 'solid core' tokens, greed returns and the show goes on.

38/ Up until May 2021 we then had another peak as NFTs came through, more infrastructure and ecosystems, insane speculation on meme coins creating an overinflated market where the speculation and crap is too far ahead of the 'whats real'.

39/ These parabolic markets where the alt mc is increasing vertically are the ones you need to watch carefully. These are the ones to worry in and make sure you take profits because it isn't sustainable.

40/ In these moments, like May, something external happens such as regs comments on $BTC , Elon , global markets dropping or pandemic news, and it knocks out the momentum of the run from which it cannot recover and the speculative bubble collapses, with the the market then…

41/ …correcting back down once more to the levels where the solid core prices became opportunities (Like $DOT at $10 ).

42/ We've then just had another much smaller version of these moments with the emergence of gaming and metaverse (although the market wasn't moving parabolic enough to constitute anything significant).

43/ One thing you have to understand is that the projects building on the 'solid core' do not care about these crashes. The fundamentals in the core continue growing regardless. What drops is just the level of speculation in the bubble.

44/ These companies don't halt development of their platform based on the movements of $BTC . Nobody in these companies is saying "Guys, we need to halt development of our NFT tech/DeFi loans/blockchain platform, BTC just dropped!". It goes on growing and expanding regardless.

45/ This is why the market recovers fast since 2020. Theres now too much hype and shill in the developments of the 'substance' which then fuels the speculation.

Does this mean 10x's forever and ever into the future?

46/ No. It means you need to change your understanding of the market. Going forward crypto is going to be increasingly diverse. Just as how the tech market evolved. We are going to see some trends booming, others collapsing.

47/ Infrastructure which supports it all moving to the front corresponding to the level of adoption. Increasingly the crypto market is going to move based on adoption and usage as people use these crypto platforms in NFT/DeFi/Gaming and others.

48/ The level of speculation will reduce over time. We are going to move along a spectrum from a market composed of pure speculation (as it was in 2018) to one of increasingly adoption and utility.

49/ Eventually most tokens prices will be based primarily on its metrics of usage with speculation playing a much lower role.

This is why I tell people you want to seize the opportunity we have in these early years of crypto alts.

50/ You want to make the most of the speculation era, riding these speculative bubbles to make as much as you can. Especially so in the bubbles towards the end of this 'game'.

51/ There is huge life changing gains to make as this technology grows and that growth is speculated on (aslong as you take profits on the way up and don't get rekt on junk).

Importantly: Understand there is no connection between 2013, 2017 and now. Understand this.

52/ You cannot compare a 2013 market with the diverse alt market of crypto in 2022, or the speculative alt market of 2017. You may aswell be comparing the crypto market today to the potato market.

53/ The market has changed so much that any comparisons are pointless and useless with the mechanics of the markets being too different. There are no alt market cycles running from 2013 to 2022.

54/ If you see someone pulling out a crypto chart that shows some pattern and prediction from 2013 to 2021, they are a moron.

55/ Not only is the alt market completely different, but with the now vast amount of institutional investment in $BTC , the mechanics by which BTC moves are now also completely different. So what should you do going forward: Be smart.

56/ Look at what crypto usecases are actually getting adoption, what is the underlying projects supporting those, which of those have strong narratives for gains.

57/ Always be buying projects which appear to be in the 'solid core' of the gas giant, and should there be going forward into the future. When the market comes around so will your investment as it gets speculated on.

58/ This is why I time and time again hammer on about adoption being crucial, especially in platforms. When a project/company builds on a platform its making an investment going potentially years into the future and a decision they can't change later without big cost.

59/ When the market comes around they will still likely be on that platform and your investment comes back up.

60/ If you understand this thread you will also understand why, despite me taking a very cautious risk based approach to crypto, I am as bullish as ever that we have gains to come yet.

61/ This is an emerging tech market thats going to yet grow regardless of what any external market forces may cause and every passing week is one in which the fundamentals get stronger in my holds, along with the market for them, laying the groundwork for speculation and greed.