The Recession opportunity

Recession it’s a good excuse to invest. It only depends on how long you put your goal, if you are thinking in the long term,  this could be your moment.

That’s especially true if you bet on exponential trends.

Trends are the clue. 

Sometimes we use exponential curves to have better perspective over long time periods. For example, this is the chart for BTC since 2013:

No hay texto alternativo para esta imagen

And this is the same asset but using Algorithmic scale:

No hay texto alternativo para esta imagen

The difference is clear. In algorithm scale, the trend is clear. In fact we are under the Low Dev. line. This only happened once in the history of BTC. It was in March 2020 when the price was at 5k and the Low Deviation at 7.5k. Only two years ago. So much has happened since this date.

We’ve seen BTC at 68k, which was a crazy high price for a lot of analysts, but not so crazy if we look into the long term trend.

And we are now at 20k, and a lot of people who bought at the ATH think they’ve lost everything, some very depressed. But if you take some perspective, this low price is x4 from the 5k price of just two years ago. The trend is there, even in the lower bands.

Investing in recession is not a good advice only in the crypto market, we’ve seen similar exponential trends in other assets, like for example Amazon.

This is the price chart for Amazon since 2011:

No hay texto alternativo para esta imagen

And this is the Log Scale chart for Amazon:

No hay texto alternativo para esta imagen

As you can see, the trend is more clear in this second graph. Amazon returns since its IPO is 115.000%. Not bad.

Imagine we are back to the 2002 Dotcom crash, and you decide to invest 1k $ into Amazon. Crazy, right? All the media is talking about recession, bubble cash, … well, the return for this investment would be 500k now. Or maybe you could invest in Amazon during the financial crisis of 2008, now those 1k $ would become 80k. 

The tricky point here is to be able to recognize which project in 2002 was gonna survive the crisis. Hundreds failed, but Amazon survived and achieved this exponential trade rise.

In my opinion, the fundamental characteristics of BTC makes it the perfect exponential asset, as we’ve seen in the last 10 years. But I’m also confident in its capacity to survive. A lot of cryptos can disappear in the next few years, but Bitcoin has demonstrated incredible resilience.

Since January 3, 2009, the official launch of the Bitcoin network, It’s been over 5,000 days since the Bitcoin network has been up and running, without problems. It’s been uptime 99.99%. The best level of service I’ve ever seen in any technology.

Meanwhile, the fundamentals of BTC shows a new ATH Hash Rate:

No hay texto alternativo para esta imagen

The BTC network creates a new block of consistent immutable information every 10 minutes, it’s like a heartbeat, the heart of the network. The hash Rate, following this comparison, is like oxygen. Miners are sending more oxygen than never to the network. It looks quite healthy.

No hay texto alternativo para esta imagen

If this hash rate continues to grow, the next halving may come earlier than we think.

That’s why it’s so important to look into the trends if you are a no hurry investor, more than the price charts. And don’t be afraid of recession. Maybe it is a great opportunity. 

Investing during a recession isn’t a bad idea if you are thinking long term. That’s especially true if you are betting on exponential trends.

Yours in crypto

KEEP IN TOUCH & SUBSCRIBE TO OUR MARKET NEWS

This us the World Wide Investor Site, are you resident of the United States of America?