Bitcoin: Comparing Years of the Market Cycle

Hey everyone and thanks for jumping back Into the cryptiverse today we're going To talk about Bitcoin and we're going to Be discussing various years of the Market cycle and making some comparisons In ways that we have not done so before If you guys like the content make sure You subscribe to the channel give the Video a thumbs up and check out the sale On into the cryptographers premium at Into the that sale is Going to end on Wednesday so make sure You lock in the lower rate let's go Ahead and jump in now we've often talked About the the cyclical nature of Bitcoin And how we had 2014 as a bear Market Year we had 2018 as a bear Market year And of course we also had 2022 as a bear Market year and in fact in q1 of 2022 When we saw Bitcoin rallying back up to The 200-day SMA we you know we more or Less just decided hey guys it's probably Going to get rejected and we're likely Just going to experience another bear Market year thanks to the deteriorating Macro can conditions but what I wanted To do in this video is is hone in a Little bit here on on the individual Years and then averages of those years Okay so it is dubious I know You have 2014 2018 and 2022 year to date As a function of time throughout their Entire year what you'll notice is that They ultimately give drawdowns but

They're all very different from one Another right like one was down about uh You know 2014 was down about 60 percent As it measured from the start of the Year but 2018 was was you know more so Down about 75 percent or so measured From the start of the Year whereas 2022 Was somewhere in between I had me Wondering what if you were to take an Average of 2014 and 2018 could it Provided it could have provided any Insight into what would be a likely Outcome for 2022. so if you come up here And we put in these average we take an Average of 2014 and 2018 and overlay it That's what you get this is sort of the Line that that comes in between right Here and if we go ahead and remove 2014 And 2018 and then add on 2022 what's Interesting is that 2022 sort of Oscillated around what the average was Is from 2014 and 2018 and actually ended The year with a drawdown as a function Of time measured year to date from January 1st that was basically the same As the average of 2014 and 2018. you can See that by the end of the year if you Zoom in here 2022 the drawdown or the ROI if you just Normalize it to one was 0.346 whereas The average of 2014 and 2018 was 0.338 So it was essentially the same thing now Probably know where I'm going with this Right what if we were to do the same

Thing with 2015 and 2019 now the reason We might want to do that is not to tell Us what has to happen this year but just To tell us what could happen this year Based on the context of history now we Always understand you know it's Something I see in the comment section All the time we've talked about you know We've talked about plenty of times and It's one of the reasons why I said Statcash right in 2022 is Bitcoin has only ever existed during Relatively loose monetary conditions now There was a period a few years ago where The Fed was raising rates but you know It didn't last very long the economy was A much better off at the time we also Didn't have very high inflation this Time the Federal Reserve is likely going To remain a bit more hawkish longer than They otherwise would have had inflation Not gone up as high as it has So we understand that you know these Years are not going to be exactly the Same right we understand there's a Recession risk we understand that right And I and I I don't want to minimize That aspect of it and it's why I will Continue to say that having a healthy Cash position is not a bad way to go Right it's not a bad way to go at least Until you know until um until the macro Looks better but it doesn't mean that All assets are doomed to just go down

Monotonically until that time so one Thing you should take a look at Is 2015 and 2019 and the reason is Because they came after the bear Market Years right the primary bear Market Years of 2014 and 2018 these were the Years that came after it you'll notice That both of them ended the year between One and two but what I want to do is Take an average of them what you will Notice before I take an average is that Both years actually saw a bit of Drawdown before they saw any type of Sustained rally 2019 only saw about a 10 Drawdown as measured from the yearly Open whereas 2015 had closer to a 45 Drawdown or so so clearly 2015 had a Much diff at a much rougher start to the Year and one of the reasons for that is In 2018 the capitulation the 50 Capitulation actually came in December Whereas the 2014 bear Market was not Actually over until January 2015 and you Can see that reflected on this chart Right like it took an extra month in That bear Market into the next calendar Year whereas in 2018 it was just done by December But what you will notice is that they Both did go slightly lower but both of Them ended the year positive right from As measured from the yearly open what I Want to do now is take an average of 2015 in 2019. so we're just going to

Take an average and that's what you get Now I'm going to hide 2015 and I'm going To hide 2019 and just look at the Average of the two years that came after The primary bear Market years at 2014 And 2018. I'm also going to Overlay 2023 Which of course just started So far 2023 as measured year to date is Actually performing better than the Average of 2015 and 2019 which you'll Notice if you take the average 2015 and 2019 the drawdown from the yearly open Was about 25 at its worst if you take The average now again 2015 did see a Worse drawdown but also 2022 was actually saw a worse drawdown Than 2014 measured year-to-day as a Function of time by the end of the year So interestingly enough though the Average what you'll see is the average By the end of the year was about 1.66 or So let's say you know that that let's Say you had a 60 rise in the price of Bitcoin or something you know if you Were to go take a look at at where Bitcoin opened the year They'd opened the year at 16.5 K now a 60 Rally from that level would actually Put it you know at around 27k or so 26 27k and to me This sort of represents one of the more Optimistic scenarios right so like if Bitcoin is trading at that price by the End of the year I would say things are

Going pretty well right things are going Pretty well Bitcoin straight into that Price at the end of the year the other Thing we should consider is that there Was a drawdown right a further drawdown Even if you take the average of both Years to the tune of 25 percent now note That the drawdown from both years that Went below their yearly open occurred Fairly early on So within about the First three months or so because we know In 2019 by time April rolled around Bitcoin was Off to the Races in 2015 Bitcoin capitulated in January and then After capitulating it sort of hung Around the lows until the last third of The year and then it took off right What you'll notice is that if we were to Just say take well what is a 25 drawdown Represent from the yearly open that Would get Bitcoin to just above that 12 000 level now the twelve thousand dollar Level is an interesting level of course I mean that would represent I believe About an 80 you know something like an 80 80 something percent draw down from The prior all-time high and I'm not Saying that it you know it has to go to These prices but it just shows you that You know there is reason to to be at Least a little cautious as we go into 2023 history shows us again history Shows us if you take a look at 2015 and 2019 history shows us that in both

Instances The yearly open did not Mark the low for The year right in both cases So in both cases the yearly open did not Mark the low for that year in 2019 while We went lower than where we opened the Year it did not put in a new market Cycle bottom whereas in 2015 it did You'll note that 2019 saw its lowest Price within the first month or two and The same thing occurred in 2015 as well Right it was within the first month or Two so the main thing I think to think About here Uh in addition to taking averages is What you'll notice is that 2019 had a Solid first half of the year and the Second half was pretty bad right it was Just a slow bleed and everyone sort of Tuned out again 2015 had a rough first half but the Second half was strong and this sort of Ties into what we were talking about Yesterday when you look at monthly Returns and note that while 2018 2014 And 2022 all had about eight to nine red Months 2015 and 2019 had you know it was More less a mix right you had five or Six green months five or you know six Red months something like that both of Those years and so I would argue hey There's a good chance that 2023 it won't Be just down like it was in in 2022 I Think the main thing to to sort of think

About as we as we go throughout 2023 is And especially comparing to 2015 and 2019 I think the main risk that will exist is Is a recession a recessionary risk right Now we've seen Bitcoin withstand a lot Over the last year we saw the collapse Of Luna and UST we saw the collapse of Uh you know the the fall of Celsius the Fall of block five the fall of FTX and Now there's even other companies right That are that are coming under scrutiny Even today but we're still seeing Bitcoin hold its own right to some Degree I mean now it has continued to Slowly push lower but the drawdowns have Not become as intense as they were say a Year ago right or six months ago they They've gotten a little bit more Manageable as time has gone on and so Arguably the the larger risk that that Bitcoin faces over the next 12 months While I do think there are some elements Of you know are all these other Essential those platforms are they Solvent are they not and if they're not I think Bitcoin will take a hit and that Could lead to us going below the yearly Open Um you know if some of these other Companies are proven to be not solvent Then you could easily see Bitcoin come Back down and and and repeat history Like like we did in 2015 and 2019

And suppose that Bitcoin does get some Type of a rally at some point let's say I don't know Q2 or something like that The main risk I think later on in the Year let's say Q3 and Q4 would be Are we going into a recession right Here's the thing that is worthwhile to Consider right for for 2023 here's the Thing that's worthwhile to consider what Comes after 2023 it's the having year For Bitcoin right so I would like to see you know inflation Come back down this year and I'd like to See the FED continue to hike interest Rates and keep them elevated to make Sure that inflation comes back down so That by the time the 2024 rolls around We're just back in business right we're Back in business and let me show you What I mean We looked at Bear Market years we looked At recovery years where Bitcoin mostly Goes sideways and sometimes it goes Lower right 2015 and 2019 did push lower Than their yearly opens for at least the First part of the year and then they Recovered later on Let's take a look at having Years 2012 2016 and 2020. sorry 2020. what do you Notice they're all relatively good years Relatively good years now let's take an Average so it'll take an average of 2012 2016 and 2020 and you get something that Looks like this now what I'm going to do

Is I'm going to hide 2012. by the way Before I hide it note that 2020 actually Gave the best returns out of all three Of those right 2012 was second best 2016 Was worse 2020 was the best Bitcoin did A lot in 2020 when you actually think About where it started and it's low and Then where it actually ended the year But if we go back and hide these and Just look at the average Bitcoin went up on average about 3x in Its having years as measured year to Date from the start of the year so let's Imagine that Bitcoin has a fairly Sideways year okay let's imagine that You know we we spend some time at prices Lower than where we are today we spend Some time at prices higher than we are Today but suppose we enter into 2024 At maybe a similar valuation as today Right which is a possibility and you Know I know that that might sound Somewhat depressing but it is a Possibility right and there's two ways We could get there right there's one way We go up and then we come back down Later on because of a recession or maybe We go down first because everyone's Scared of a recession and then we pop Back up later on and then when we get a Recession like we got in 2020 although It was very brief it's just a higher low Or something right like these are There's of course various paths to get

There but wherever Bitcoin ends this Year whether it's 16k 15 14 13 12 11 10 Or whether it's 20K 22k I would argue That 2024 Being the having year and likely also a Period where we go back into some some Form of quantitative easing is probably Going to be a better year okay so my General speculation is that 2023 won't Be as bad as 2022 but I do think that 2024 will likely be better than 2023. I Will I will continue to say I do think That 2023 is more or less just going to Be A recovery year right where you know it It might it might put in higher prices For a few months but we're also probably Going to have some bad months as well Okay 2015 again 2015 and 2019 shows us That you know that these years after the Major bear Market years can be somewhat Brutal not always from a price-based Capitulation point of view But sometimes from just from a Time base Perspective right because everyone wants The price to go back up and sometimes it Just it just takes a while you know Sometimes it just takes a year before You're really going to see things Start to mature and and go back up so I Will say this right as we as we really Get going into 2023 I will say this If we see some type of further drawdown Within the first quarter or two

I think that might represent uh I mean You can kind of see what what happened The last two times right I mean that Could be a great opportunity I'm not Saying it right now is not but I'm just Saying if you were to see something like That Um it would it would somewhat rhyme with An average of the past and also in the Same way if we just scrape the bottom For half the year that would be fairly Normal as well What I think is a less likely scenario Is a rally out of the gate you know Where where Bitcoin goes up three or Four x right like I don't think we're Gonna see that in 2023 mainly because of Of how bad the macro is the macro in 2023 unfortunately is worse than it was In 2019 right 2019 wasn't nearly as bad As it is today I mean like we didn't Have high inflation back then and and we Didn't have the FED raising interest Rates at a pace faster than we've ever Seen before so I don't really think that That this is in the cards but it doesn't Mean that there won't be a rally at some Point this year similar to what we saw In late 2015 Or somewhere we saw in 2019 maybe just a More You know tempered version of it so I Think it's worthwhile to sort of look at Look at the context of the past to say

Hey this is what has happened in the Past with Bitcoin during the only thing We've known which is loose monetary Policy and I'm not just going to be Blind to the idea that we are now in a Period of much tighter monetary policy This is what we have to work with right All we have to work with so far is Relatively loose monetary policy and Knowing how Bitcoin performed during That time and during that time we did See us go lower than the yearly open for A month or two at least and in 2015 a Lot longer but by the end of the year Things are finally starting to pick back Up okay so I think this is you know a Useful chart to look at taking the Averages of them to try to figure out Again what is a potential you know a Potential scenario again just to remind You this is what the average of 2015 and 2019 looks like right if you take the App average you sort of If you take the average you sort of just Get an immediate dip down within the First month or two followed by you know A slight move to the upside and then a Relatively boring second half of the Year if you take an average of of 2015 And Um and 2019. so again as we go into 2023 I think the main things to think about Are knowing that next year is the having Year we'll probably go back to QE next

Year the FED will likely cut rates next Year this year still going to be Somewhat hard okay doesn't mean the Price can't go up some but you should Also still be prepared for a potential Downside as the context of History Suggests thank you guys for tuning in Make sure you subscribe if you're not Subscribed give the video a thumbs up And again check out the sale on into the Controverse premium at into the that sale is going to End on Wednesday I'll see you guys next Time bye


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