People use summer time and free time in general to get away from the information overload in crypto environments and above all to think out loud and reflect. It is time to go back to the screen and put in order all the thoughts, ideas and drawings that I was reflecting in the workbook during those days. Thanks to this extra time that life gives me, I can think better about the future and not focus so much on the present, normally that is when things have gone better for me.
All of us managers are facing a huge challenge, as we are living through complicated times at all levels. Not only macroeconomic, but also of confidence and mixed feelings in the face of what looks like a major economic recession. The result of bad monetary policies that once sought to stimulate consumption and now turn us into extreme savers, due to the uncertainty of what will happen. How cold will the winter be? Will there be a nuclear war or not? Will access to credit be extremely expensive? All of this continues to be the perfect breeding ground for turning the markets into authentic tinderboxes and specifically the crypto market in a powder keg surrounded by a fire.
Post COVID inflation is epic, with timber -60%, copper -35%, oil -35%, minerals -60%, DRAMs -46%, gold -17% and silver -39%, and how could it be otherwise, deflation is already peeking its claws. Two extremely important pieces of information that we must understand in order to be able to simulate the most realistic scenario possible:
- It is not normal that in the month with the highest spending of the year (August), together with December, the CPI has fallen, which has led us to have cheaper products and services (not all, due to the fact that at that time the balance between supply and demand in some sectors is broken).
- Central banks and the US Federal Reserve want to show us that there is only one way, to generate a deflation that alone will lead us into a major economic recession, lowering consumption throughout the world and causing a contagion effect in all chains (employment, supplies, credits, suppliers, etc.)
I am very afraid that all of the above has already been discounted. Focusing on the crypto market, it is time to make decisions that very few people are capable of making. It is time to start seriously and very rationally evaluating entering the market, buying its bad numbers, buying its strong fall and showing that knowing how to manage capital, emotions and the macro, it is possible to sow a very promising future. The experience of having lived through 2 market cycles of deep capitulation and my way of understanding the cycles of this type of market, clearly predict that in the next 12-16 months we can see a large-scale rebound effect.
With perspective and clear ideas, we have on the table a fall of the crypto market between -75% and -90% (ratifying my hypothesis that all this pessimistic scenario in the economy has already been discounted, since money when it smells fear runs away from places where it considers that it is not safe. The crypto sector (whether we like it or not is still not considered by money a safe space, although it is a very profitable space), therefore we may be facing a floor of those that mark an end of trend and the beginning of another, I could not continue to fall another -75%. We are coming out of the Merge and the Cardano fork is coming. We have already entered the pre halving phase of bitcoin and several bull traps have been triggered, leaving many unsuspecting retailers completely trapped.
With these assumptions many factors are cleared from the equation, leaving us with only one, “Time”. If we manage to master time without chasing it, we have the equation solved.
My plan, forged over a slow fire with a solid thesis, has guided me towards the in-depth study of the connections that blockchain-based technology projects (startups) and institutional money (which is capable of making a market irrational and determining trends) will have directly in the verticals or market niches of gaming, metaverse, infrastructure and the new capital market (DeFI).
Thanks to this, I have been able to identify large players in the sector that can have a high sustained market capitalization in the next 12-16 month, thanks to having clear business models that monetize and create cash flows in a bidirectional way between project and users according to tokenomics, value proposition, service and security.
In a first filter I see capacity for organic growth and achievement of objectives to:
INFRASTRUCTURE: ETH, SOL, ETC, MATIC, APTOS, ADA, KAS and RVN
DEFI: METIS, GMX, OP, FXS, CRV, DOT, AAVE and LINK.
GAMES AND METAVERS: ROSE, MYRA, MANA and SANDBOX
I leave you with a little treasure map so you have some time coordinates on what the market has done, what it is doing and what you can expect the market to do. I have clearly marked when I will start to take action, and it is not only about paying attention to a chart, you must make a challenge to the market when you know 100% that your plan is going to work because of the harmony between chart, fundamentals and trend.