Everyone wants to catch the Bitcoin and crypto bottom. Picking up the rock bottom prices on these
assets can be life changing in a couple short years when another parabolic bull run returns.
But 99 percent of people won't catch the exact bottom. They wait, they get scared,
and they don’t pull the trigger when they should have. So how do you catch the bottom?
Well find out in about ten minutes, because it’s time for Chico Crypto!!
(bitcoin falling to 20k 2017 high) So, there is a lot of fuss over if we are near the
Bitcoin bottom. Why? Well Bitcoin is basically at last cycles all time high, of around 20k.
In previous cycles, the bitcoin bottom never has fallen lower than the top of the cycle before it.
(bitcoin cycle 2011 and bottom)(bitcoin cycle 2013 and bottom)(bitcoin cycle 2017 and bottom)
2011, the bitcoin top was basically 30 dollars, the bitcoin bottom during the
following bear market was about 76 bucks. End of 2013, the bitcoin top was near
1000 dollars, and the following bear market low was around 200 bucks.Then end of 2017,
the bitcoin top was near 20k, and the following bear market low was near 3k.
So, where the price has fallen, to 20k, the 2017 previous cycle high, is unprecedented territory.
Many argue that this will HODL, as it’s never happened before.
Well, my opinion….it’s not the Bitcoin bottom, I have a feeling we are going to go lower…
So does that mean an investor should hold off on
purchasing Bitcoin? Should you wait and try and time the exact bottom??
Well my opinion says no…purchasing here won’t matter in the long run as you are getting close
to the bottom still. Dollar cost averaging during a bear cycle is the smartest move…
(2017 bottom) What do I mean? Well let’s just look at previous
cycles for an example. 2017 and the following bear market, the bitcoin price held around 6k from June
of 2018 all the way until November of 2018 before the capitulation dump down to the lows of 3k.
(2017 positive return on btc) So if someone was to buy at
around 6k during that time, how long did it take for their investment to have a return?
Well pulling out the chart, around May of 2019, BTC crossed 6k again. So if you
bought at 6k in November 2018 right before the dump, it would have only been 6 months
before the investment turned positive. In the long run, it didn’t matter if you bought at 6k.
(2013 bitcoin bottom) Another example with the cycle before?
2013 and the following bear market, the price of bitcoin held around 350 bucks from October of 2014
to the end of the year, before a capitulation dump below 200 dollars.
(2013 postive return on btc) If you were to buy around 350
bucks, how long did it take until the investment turned positive? Well expanding out the chart,
we can see the price officially recrossed 350 by the beginning of November of 2015.
So less than a year, your investment would turn positive
if you bought before the capitulation dump back in December of 2014.
Sooo, buying now isn’t stupid…of course you might not hit the exact bottom,
but based on history of previous cycles, it can only take 6 months to a year,
for the investment price to look as if you were a genius.
My recommendation? DCA, dollar cost average, putting in a set amount every week,
2 weeks to a month over the next 6 months, and it’s possible to grab crypto prices,
which will never be seen again. Work towards that full Bitcoin, strive to obtain 32 eth.
Because next bull run, it will be unobtainable for most folks.
But speaking of ETH, it’s time to shine a light on a major opportunity I see in this bear market…
(Link #1 Evan Van Ness tweet) Everyone knows, Ethereum is moving to proof of
stake, Evan Van Ness, stonch Ethereum supporter who understands the merge and timeline for it,
better than most in the space tweeted “The Merge:Scheduled
for mid to late September. IMPORTANT CAVEAT: scheduling is done via block number and thus
it can fluctuate due to hashpower changes” which he explains below.
Ethereum didn't schedule a gregorian calendar date for the merge. We did something more important: we
scheduled the difficulty bomb, and we delayed by a specific number of blocks: 700 thousand of them.
Which puts the estimate of the merge happening sometime in September.
When this happens, the miners for Ethereum go away,
they will no longer be securing the chain, confirming blocks, and earning the rewards,
and the big one….earning the FEEs. The gas Fees, user’s pay to transact on the Ethereum blockchain.
(Link #2 Ethereum fees november) Now when the markets return bullish,
and Ethereum gets highly used once again, these FEES can be astronomical. Per example,
back in November of 2021, we can see the 1 day fees paid out by users to the miners
was over 80 million dollars, and the 7 day average was over 73 million.
(Link #3 Active Validators)(Link #4 Ethereum staking APR)
Now, there are just over 402 thousand active validators for ETH2, and if the
fees are split equally between them, it means during a bull run, validators will be getting
basically an extra 200 dollars, from fees per day. Which is an extra 6200
dollars per month!! This is besides the block rewards which as of right now is just
above 4 percent APR, or .13 of an eth per month. In a bear market, no one sees this opportunity,
of becoming an Ethereum validator and staker…as getting the 32 ETH required to stake,
means you have the “mining machine” for Ethereum, which never needs upgraded,
doesn’t need maintenance, and doesn’t suck electricity and thus money out of your pocket.
Ethereum is becoming the settlement layer for all chains…Solana is bridged to Ethereum,
Bitcoin is bridged to Ethereum, Binance Chain,
avalanche, polkadot, and even cardelayno is bridging back to Eth.
So in my opinion, will the rumbling of the bulls come back, the amount of fees
Ethereum will be generating will outdo the November 2021 numbers by a longshot!
Now many of you, will say but Tyler…to stake and get the full block rewards and fees,
I need to have 32 Ethereum. That’s over 32000 dollars!!
Well, all I have to say is…yeah it’s a chunk of change, but if ethereum drops to 800,
it’s only 25k, and if ethereum drops to 500, it’s just 16k….but
there may be a way to get that amount even cheaper during this bear market.
(steth)(lido) Now everyone should know about
STETH, from Lido Finance. It’s a tokenized form of staked Ethereum. When staking with Lido you
mint staked tokens which are supposed to be pegged 1:1 to your initial stake.
Thus, your staked tokens can be used across the DeFi ecosystem,
unlocking them to be used…while solo staking locks the Ethereum, until after the Merge.
Although, the ETH behind STETH is still locked too, this just creates a synthetic version…
Now, there has been a liquidity crisis going on with STETH
due to market conditions, Celsius and 3AC, and the 1:1 peg has been collapsing…
(Link #5 STETH arbitrage) Meaning, you can pick up STETH,
for cheaper than regular Ethereum. And traders are seeing this as an arbitrage opportunity,
a chance to get Ethereum on the cheap…for rock bottom prices which will be much cheaper
than after the merge when the beacon chain unlocks Ethereum for withdrawal.
Now there are other forms of STETH, the decentralized rETH from rocketpool,
but this is holding it’s PEG. Although there is another
form, VETH, voucher ETH, who even has a lower peg than Lido’s ST ETH
(ethereum price)(veth price) Looking at the price of Ethereum
last week when I shot this video…it was at 1076 dollars. Looking at vETH,
we can see it was sitting at about 868 dollars.
Voucher ETH, just like steth, entitles you to 1 ETH when the unlock happens after the merge.
So if you think Ethereum isn’t going to drop below 868 dollars, by the time of the unlock,
this would be a solid way to pick up ETH.
Although, remember…I think we are going to go lower, and Ethereum could hit between 500 to 800
dollars.That would mean if this disparity held, voucher ETH
would hit between 650 dollars to 400 dollars. If 400 dollars is hit,
that would mean 32 ETH, to become a solo validator would only cost about 12800 bucks.
I’m not buying vETH yet, but I’m keeping my eye on it…looks like a great way to increase
an Ethereum stack, you just have to time it right, but of course beware of the risks.
Things don’t always work out the way I think….Cheers I’ll see you next time!