I\u2019ve never seen a bigger disconnect between prices and fundamentals in\u00a0crypto.<\/p>\n
Crypto has shed $1 trillion in market cap since December. Yet we\u2019ve also witnessed the most bullish regulatory and institutional developments in the industry\u2019s 15-year\u00a0history.<\/p>\n
Let\u2019s dive into the big contrarian opportunity and how we\u2019ll\u00a0profit.<\/p>\n
November 2022 is a month I\u2019ll never\u00a0forget.<\/p>\n
It was the month I got married. And then on my honeymoon, when I\u2019d promised my wife I would take a vacation for the first time in six years, crypto exchange FTX collapsed. Sorry,\u00a0honey.<\/em><\/p>\n What if I told you sentiment among crypto investors in recent weeks has been even lower than during the unearthing of one of the biggest frauds in financial history?<\/p>\n Crypto\u2019s \u201cfear and greed\u201d index recently hit one of its lowest levels\u00a0ever:<\/p>\n Source: Coinmarketcap<\/em><\/p>\n For sentiment to be this catastrophic, surely, we must be witnessing another industry-shattering collapse\u2026 right?<\/strong><\/p>\n The US Securities and Exchange Commission (SEC) dropped its lawsuits against Coinbase (COIN), Robinhood (HOOD), Uniswap (UNI), Binance, OpenSea, and\u00a0Gemini.The SEC created a Crypto Task Force focused on providing regulatory clarity to the industry.Operation Choke Point 2.0\u200a\u2014\u200athe banking blockade against crypto\u200a\u2014\u200awas 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\u2019ll offer crypto services.President Trump signed an executive order creating a Strategic Bitcoin\u00a0Reserve.<\/p>\n After a decade in the markets, I\u2019ve developed a certain numbness to volatility. Prices rise and fall, sometimes for no reason at\u00a0all.<\/p>\n But even by crypto standards, this disconnect between prices and fundamentals is unprecedented.<\/strong><\/p>\n This has been the most bullish month for crypto (maybe ever). So why are prices falling to multi-month lows?<\/p>\n The answer lies in market structure.<\/p>\n It\u2019s moving in lockstep with the stock market, which is under pressure as investors grapple with economic uncertainty.<\/a><\/p>\n It\u2019s never nice looking at your portfolio and seeing a sea of red. But it\u2019s important to put this selloff into\u00a0context.<\/p>\n Crypto has been the best-performing asset class by a mile over the past decade. Volatility isn\u2019t just a bug; it\u2019s a feature of exponential growth.<\/p>\n Since 2010, bitcoin (BTC) has experienced 16 separate 30%+ corrections. That\u2019s roughly one per year. And yet it was still the top-performing asset. <\/strong>Volatility is the price you pay for\u00a0returns.<\/p>\n After the 2016 US presidential election, bitcoin surged through December before falling 38% starting in\u00a0January.<\/p>\n After the 2020 election, crypto prices rallied into the new year, then fell 32% in early\u00a0January.<\/p>\n This time, BTC peaked on January 20 and is again down\u00a030%.<\/p>\n What matters is that BTC has been substantially higher 12 months after the past three presidential elections (2012, 2016,\u00a02020).<\/strong><\/p>\n These selloffs can be scary, especially if this is your first time experiencing a drop like this in crypto. While prices could dip lower from here, our research continues to suggest this is a mid-cycle pullback and prices will be much higher over the next 12\u00a0months<\/a>.<\/p>\n My guidance right now is to sit on your hands and do nothing. And if you have some dry powder, buy some more of your favorite\u00a0cryptos.<\/strong><\/p>\n These are great prices for quality cryptos.<\/strong> The hard thing is that great prices never feel great at the\u00a0time.<\/p>\n If you already know which crypto to buy that\u2019s\u00a0great.<\/p>\n If not, here are 3 early-stage cryptos to buy in\u00a02025<\/a>.<\/p>\n For more insights and analysis, <\/strong>subscribe to The Jolt\u26a1 <\/em>newsletter.<\/em><\/strong><\/a><\/p>\n We publish investing research every Monday and\u00a0Friday.<\/p>\n Click here to learn\u00a0more<\/a>.<\/p>\n \u2014 Stephen McBride, Chief Analyst at <\/em>RiskHedge<\/em><\/a><\/p>\n Crypto\u2019s big contrarian trade<\/a> was originally published in Coinmonks<\/a> on Medium, where people are continuing the conversation by highlighting and responding to this story.<\/p>","protected":false},"excerpt":{"rendered":" The \u201cfear and greed\u201d index reached Extreme\u00a0Fear I\u2019ve never seen a bigger disconnect between prices and fundamentals in\u00a0crypto. Crypto has shed $1 trillion in market cap since December. Yet we\u2019ve also witnessed the most bullish regulatory and institutional developments in the industry\u2019s 15-year\u00a0history. Let\u2019s dive into the big contrarian opportunity and how we\u2019ll\u00a0profit. It\u2019s all […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-55206","post","type-post","status-publish","format-standard","hentry","category-interesting"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/55206"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=55206"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/55206\/revisions"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=55206"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=55206"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=55206"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Let\u2019s examine what\u2019s actually happened in the past\u00a0month:<\/h3>\n
Crypto has been absorbed into the global macro\u00a0trade.<\/h3>\n
We\u2019ve also observed crypto\u2019s post-election pump-and-dump pattern.<\/h3>\n