The Altcoin Reckoning

Summary

The speaker discusses the ongoing 'altcoin Reckoning,' a term referring to the devaluation of altcoins against Bitcoin. Despite some believing the reckoning ended, the speaker argues that larger market cap altcoins continue to hit new lows relative to Bitcoin. They emphasize that critics have been incorrect in predicting Bitcoin dominance peaks and that altcoins, at best, oscillate against Bitcoin, reaching parity during bull markets but dropping to around 0.25 of Bitcoin's market cap at the end of a cycle. The speaker also highlights that the Federal Reserve has not yet cut rates or shifted to quantitative easing, which they believe are necessary conditions for the altcoin Reckoning to end. They predict further devaluation of altcoins against Bitcoin in the coming months, suggesting that Bitcoin dominance will continue to rise, and caution investors to be aware of the risks of holding altcoins over Bitcoin.

Takeaways

• 📉 The speaker believes the altcoin Reckoning, which refers to the devaluation of altcoins against Bitcoin, is still ongoing, with many altcoins reaching new lows against Bitcoin.
• 🔄 Historically, altcoins are considered oscillators against Bitcoin, reaching market cap parity during bull markets but devaluing to around 0.25 of Bitcoin's market cap at the end of the altcoin Reckoning.
• ❌ Critics argue that altcoin markets have bottomed against Bitcoin, but the speaker disagrees, noting that Bitcoin dominance has continued to rise despite these claims.
• 📈 The end of the previous altcoin Reckoning cycle was marked by lower interest rates from the Federal Reserve and a shift from quantitative tightening to easing, neither of which has occurred yet.
• 👎 The speaker cautions against cherry-picking successful micro-cap altcoins, emphasizing that the overall market trend for larger cap altcoins is more indicative of the market's health.
• 📊 Bitcoin dominance, excluding stablecoins, is expected to reach about 64%, and including stablecoins around 60%, according to the speaker's predictions.
• 🤔 The speaker acknowledges the possibility of being wrong but stands by their views, which are based on monetary policy and historical market patterns.
• 🚫 Warning against investing heavily in altcoins, the speaker suggests that many investors may be better off holding Bitcoin due to its relative stability and performance over time.
• 📚 The importance of Bitcoin as a unit of account is emphasized, with the speaker arguing that it is a more reliable standard than the US dollar in the context of cryptocurrency investments.
• 📈 Despite the rise of various altcoins, Bitcoin's dominance has been consistently increasing, which the speaker attributes to high-interest rate environments and quantitative tightening.
• ⏳ The speaker anticipates a final devaluation of all Bitcoin pairs in the coming months, suggesting that patience is required for the market cycle to play out fully.

Q & A

What does the term 'altcoin Reckoning' refer to in the context of the video?

The 'altcoin Reckoning' refers to the devaluation of altcoins against Bitcoin, where altcoins continue to hit new lows compared to Bitcoin, indicating a prolonged period of decrease in their value relative to Bitcoin.

Why does the speaker believe that the altcoin Reckoning is still ongoing?

The speaker believes the altcoin Reckoning is still ongoing because altcoins, especially larger market cap ones, continue to hit new lows against Bitcoin, and no significant monetary policy changes like rate cuts by the FED or a shift from quantitative tightening to quantitative easing have occurred.

What is the speaker's view on the performance of altcoins during peak bull market phases?

The speaker views altcoins as oscillators at best against Bitcoin, reaching a market cap approximately equal to that of Bitcoin during major peaks, but dropping to around 0.25 of Bitcoin's market cap at the end of the altcoin Reckoning.

Why does the speaker suggest caution when investing in altcoins?

The speaker suggests caution because they believe that most altcoins are still devaluing against Bitcoin, and that the majority of the top 10 altcoins by market cap are putting in new lows against Bitcoin, which could lead to further losses for investors.

What is the speaker's prediction for Bitcoin dominance in the upcoming months?

The speaker predicts that Bitcoin dominance, excluding stablecoins, should hit about 64%, and including stablecoins should hit around 60%, indicating a further increase in Bitcoin's market share relative to altcoins.

What does the speaker attribute the end of the previous altcoin Reckoning cycle to?

The speaker attributes the end of the previous altcoin Reckoning cycle to two main factors: lower interest rates by the FED and a shift from quantitative tightening to quantitative easing.

How does the speaker describe the general trend of Bitcoin dominance over the last two and a half years?

The speaker describes the general trend of Bitcoin dominance over the last two and a half years as continuously going up, despite criticisms and market fluctuations.

What is the speaker's opinion on the current state of the altcoin market?

The speaker believes that the altcoin market is still in a state of devaluation against Bitcoin and cautions that most altcoins are not performing well on their Bitcoin pairs, suggesting that the altcoin Reckoning is not over.

What is the significance of the FED's monetary policy in the speaker's analysis of the crypto market?

The FED's monetary policy is significant in the speaker's analysis because they believe that the altcoin Reckoning ended in the previous cycle due to lower interest rates and a shift in the FED's policy from quantitative tightening to easing, which has not yet occurred in the current cycle.

What does the speaker suggest will happen to altcoins in the summer months?

The speaker suggests that there will be a final devaluation of all Bitcoin pairs, including a significant drop in the valuation of altcoins, as people tend to focus on other activities during the summer, leading to a decrease in the collective bid for the altcoin market.

What is the speaker's view on the potential final capitulation of Bitcoin pairs?

The speaker believes that the final capitulation of Bitcoin pairs will occur as they break below their current support levels and drop to around 25% of Bitcoin's market cap, marking the end of the altcoin Reckoning.