After the sheer, record-breaking insanity of early 2021, crypto is currently doing, well, nothing. And that’s not the worst thing. Undeniably, one of cryptocurrency’s biggest draw cards is the sheer, take-no-prisoners volatility of it all. Coins doubling in a day? We call that Tuesday. Losing half their value two days later? Eh, whatcha gonna do?
This is, needless to say, not how markets usually operate. A sensible price target for a top-tier stock might be 20%, with a multi-month window. If something moves more than 5% in a day it’s a Big Deal. The long-term capital gains discount kicks in after you hold a stock for more than a year and that’s usually what you’re aiming for. But crypto? Crypto is thrilling. It condenses years of traditional market movement into weeks and it exaggerates those movements by a factor of 10. Even if you don’t know what’s going to happen, at least you know it’s going to be unexpected and a little bit ludicrous. It’s a financial market for the internet age, where meaning is measured in minutes and things move or they die.
However, as is often the case, price action (or lack thereof) draws all the attention, while the actually important stuff keeps ticking along in the background. Stuff like Ethereum’s forthcoming ‘triple halving’ sequence of upgrades, or Fidelity expanding its staff by 70% due to excess interest from institutional investors, or Paraguay introducing its own Bitcoin bill. Stuff like the Bitcoin mining hash rate recovering as miners find new homes. And DeFi continues expanding at an ever increasing rate, market collapse or not. Remember, bear markets are where bull markets are built.