CRYPTO Always Feels Broken Right Before IT ISN'T (This Time NOT DIFFERENT)

Summary

In this video, the speaker discusses the current state of the crypto market in 2025, addressing the struggles despite positive developments like pro-crypto policies, the end of quantitative tightening, and bullish predictions for Bitcoin and Ethereum. He analyzes market cycles, including the potential for a bear market or a rebound, and emphasizes the macroeconomic factors influencing crypto’s future. Despite bearish sentiment among retail investors, he remains a macro bull, citing historical trends and liquidity cycles as signs of future growth. The speaker encourages patience, data-driven decision-making, and managing risk amidst market uncertainty.

Takeaways

• 😀 The 2025 crypto market has underperformed, despite a pro-crypto president, the Genius Act approval, altcoin ETFs, and three rate cuts.
• 😀 Despite the current bear market sentiment, the speaker is a macro bull, emphasizing that this moment presents an opportunity for long-term investors.
• 😀 The speaker believes that Bitcoin (BTC), Ethereum (ETH), and Solana will set new all-time highs by 2026, based on current macroeconomic data and market conditions.
• 😀 Quantitative tightening (QT) has officially ended after three years, which is expected to boost liquidity and shift financial conditions, benefiting the crypto market.
• 😀 The PMI (Purchasing Managers' Index) is currently contracting but is expected to eventually expand, signaling a potential shift toward business growth and recovery.
• 😀 The recent end of QT should lead to an easing of liquidity stress, which will help drive business planning and activity, ultimately aiding the crypto market's recovery.
• 😀 Despite the bear market, the speaker argues that the tightening cycle has now concluded, which will foster future growth rather than a continued downturn.
• 😀 Historical trends show that after major liquidity contractions, such as the end of QT, markets tend to experience recovery and expansion, which supports a bullish outlook for crypto in 2026.
• 😀 Retail sentiment is mostly bearish, which the speaker views as a contrarian bullish signal, suggesting that prices might bounce when the majority expects further declines.
• 😀 The crypto market could face a few more months of volatility, but the speaker plans to stay focused on long-term goals and risk management, not reacting to short-term market noise.

Q & A

Why did the crypto market perform worse in 2025 than the 2022 bear market, despite positive developments like a pro-crypto president and ETF approvals?

The crypto market's poor performance in 2025, despite favorable developments, is mainly due to the lingering effects of quantitative tightening (QT) and the lack of liquidity in the market. This created a restrictive environment, making it easier for market manipulators to control prices and causing investor sentiment to remain negative.

What role does the end of quantitative tightening (QT) play in the speaker’s bullish outlook for crypto in 2026?

The end of QT marks the end of three years of tightening monetary policies that drained liquidity from the market. With this pressure easing, the speaker believes that liquidity will begin to flow back into the system, setting the stage for an expansionary phase in the crypto market, particularly starting in 2026.

How does the speaker describe the current macroeconomic environment in relation to the crypto market?

The speaker describes the macroeconomic environment as having been restrictive due to QT, but now shifting towards a more favorable phase as liquidity stress peaks and the Fed begins lowering interest rates. This transition is expected to foster business activity and create a better environment for crypto growth.

What is the significance of the PMI (Purchasing Managers' Index) chart in the speaker’s analysis?

The PMI chart is crucial because it tracks business activity, and the speaker uses it to show the current contraction in the economy due to QT. An expanding PMI is seen as a positive sign for economic growth, which the speaker expects to start occurring soon as liquidity conditions improve.

Why does the speaker believe the current market conditions are not indicative of the beginning of a bear market?

The speaker believes that despite the negative sentiment and market downturn, the current environment is not the start of a bear market. Instead, it reflects the final stages of the contraction phase that began with QT. The end of QT and other macroeconomic shifts suggest that the market is poised for a recovery, not a prolonged bear market.

How does the speaker view the role of Bitcoin sharks (large investors) in the current market?

The speaker views Bitcoin sharks, who are buying at the most aggressive pace in 13 years, as a strong indicator of confidence in the future of the crypto market. Their behavior is seen as a sign that institutional investors are preparing for an eventual market rebound, contrasting with the negative sentiment of retail investors.

What does the speaker mean by ‘liquidity stress’ and why is it important for the crypto market?

Liquidity stress refers to the lack of capital available in the market due to restrictive policies like QT. This lack of liquidity has made it difficult for the market to grow and has contributed to volatility. As liquidity pressures ease, the speaker expects this stress to subside, allowing for more stable and healthy market conditions.

How does the speaker view the role of retail investor sentiment in the current market?

The speaker sees the overwhelming bearish sentiment of retail investors as a contrarian signal, historically indicating that a market rebound may be near. When retail investors are overwhelmingly negative, prices often bounce as the pessimism has already been priced in.

What are the key macroeconomic factors that the speaker believes will drive the crypto market’s recovery in 2026?

The speaker highlights several key factors: the end of quantitative tightening (QT), the Fed starting to cut interest rates, and liquidity injections into the economy. These shifts will ease financial pressures and support business growth, creating favorable conditions for the crypto market in 2026.

What does the speaker mean by ‘business cycle’ and how does it relate to the crypto market?

The business cycle refers to the natural rise and fall of economic activity over time, marked by periods of expansion and contraction. The speaker believes that after years of contraction due to QT, we are entering a phase of expansion that will benefit the crypto market, as businesses resume growth and planning, which will positively impact risk-on assets like crypto.