Ever heard of the post-election pump & dump?
Crypto volatility is back.
Bitcoin (BTC) dropped 30%. Meanwhile, prices of Ethereum (ETH) and Solana (SOL) got cut in half.
In total, the crypto market has shed $1 trillion since December.
Many crypto investors are wondering “when will crypto stop going down?”
But seasoned veterans know this pullback is nothing out of the ordinary.
This is the classic post-election pump-and-dump pattern we’ve seen in past crypto cycles.
After the 2016 US presidential election, bitcoin price surged through December before falling 38% starting in January:
Source: TradingView
The same happened after the 2020 election. Crypto prices rallied into the new year, then fell 32% in early January:
Source: TradingView
Notice the pattern?
This time around, BTC peaked on January 20 and is again down 30%. Right on script.
What matters is that BTC has been substantially higher 12 months after each of the past three presidential elections (2012, 2016, 2020).
I bet we’ll see the same scenario play out again. Making this a great buying opportunity.
I’ve never seen a bigger disconnect between prices and fundamentals in crypto.
Sentiment among crypto investors in recent weeks has dropped to levels last seen during the FTX collapse:
Source: Coinmarketcap
For sentiment to be hit “Extreme Fear”, surely, we must be witnessing another industry-shattering collapse… right?
What’s actually going on is that crypto has been absorbed into the global macro trade. It’s moving in lockstep with the stock market correction, which is under pressure as investors grapple with uncertainty around tariffs.
In times like these, it’s important to have a long-term view. Focus on fundamentals.
This has been the most bullish month for crypto (maybe ever).
Let’s examine what’s actually happened in the past month:
The US Securities and Exchange Commission (SEC) dropped its lawsuits against Coinbase (COIN), Robinhood (HOOD), Uniswap (UNI), Binance, OpenSea, and Gemini.The SEC created a Crypto Task Force focused on providing regulatory clarity to the industry.Operation Choke Point 2.0 — the banking blockade against crypto — was officially ended.The harmful SAB 121 rule that made it impossible for banks to hold crypto was scrapped.The biggest banks in the world, including Bank of America (BAC), stated they’ll offer crypto services.President Trump signed an executive order creating a Strategic Bitcoin Reserve.
The disconnect between prices and fundamentals is unprecedented.
And don’t forget. The best part of the bitcoin cycle is still ahead of us.
BTC prices have followed a “3 up, 1 down” pattern. We call it the bitcoin 4- year cycle.
Every fourth year, crypto prices plunge. The last time that happened was in 2022.
Markets then recover slowly, with the biggest gains being handed out in years 2 and 3, as this table of bitcoin’s annual returns shows.
Year 2 was 2024, and year 3 is 2025:
We’re in what has historically been the best time to own crypto — the “sweet spot” that’s typically produces the biggest gains.
And if you think the four-year cycle is a myth, have a look at this chart.
It compares this bull market with the last two:
Source: Glassnode
Just look at how closely the current bull market (black line) mirrors the last two markets (red and blue lines). Until this correlation breaks, it’s best to use it to your advantage.
A year from now, this will look like a great buy-the-dip opportunity.
I understand these selloffs can be scary, especially if this is your first time experiencing a drop like this in crypto.
Remember, since 2010, bitcoin (BTC) has experienced 16 separate 30%+ corrections. That’s roughly one per year. And yet it was still the top-performing asset.
Bottom line: Crypto has likely bottomed.
These are great prices to buy quality cryptos.
Fundamentals have never been better. You got the 4-year cycle at your back. And you get to benefit from discounted prices.
Ethereum and Solana are your safest bet here.
If you’re looking for smaller cryptos with higher upside, focus on quality. Don’t go buying something stupid like meme coins.
Choose cryptos with real-world business models making real money.
I recently wrote a report on three such cryptos.
One crypto is disrupting Google. The second one has built an Airbnb for AI chips. And the third does business with big brands like Disney, Netflix, HBO, Apple, and Nike.
Click here to read the full report.
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— Stephen McBride, Chief Analyst at RiskHedge
More proof crypto is bottoming. was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.