We’ve been remarking for some time that there hasn’t been a meaningful pullback in Bitcoin over nearly this entire bull cycle – and nothing over the past year greater than 20%.
From where I’m sitting, cryptos (defined as everything other than Bitcoin) have entered a bear market – the $TRUMP token launch marked the top, ending the memecoin trade and with it, canceling alt-season (this was the topic of the last portfolio update, in case you haven’t read it).
Every bull run in Bitcoin has multiple downdrafts exceeding 30% ,40% in some cases 50% or more. That’s why being a Bitcoiner is harder than it looks. The volatility is too much for most traders to handle, and trying to trade this is nearly impossible.
Remember how we handle pullbacks:
Step 1: Do you still believe the underlying thesis? It’s that the fiat monetary era is unsustainable and coming to an end.
If so, then
Step 2: your decision in times like these are whether to buy more or just sit through and wait.
Since I put out the last mid-month portfolio and then last week’s trading alert where I took us out of Sol Strategies, Solana and Raydium, I have been scouring my various wallets and just rolling all the altcoins into BTC or the wrapped BTC for the given chain.
For the stocks – normally I’d say on a day like today, if you were waiting for the time to add your second or third tranche to the portfolio – here it is.
However, if the aim is to bottom tick the correction, it may still be early. We could go lower from here, still – it’s so hard to know because the pullbacks have until now been bought so aggressively.
If your answer to Step 1 is “no, I no longer believe the overall Bitcoin thesis” then you get out now, regardless of the price.
FWIW, I don’t think it’s the end of this Bitcoin cycle and even if it were, does it matter in the overall long term trajectory?
Yesterday, I finished mapping out the CAGR of Bitcoin since 2010 on a year by year basis, both on calendar and annual high/low – as part of another project I’m working on.
The lowest four-year CAGR on a calendar basis is 28%, and the lowest on a high/low basis (counting down years as negative) was 38%.
I don’t know about you, but my investment horizon is looking out long enough that I’m just buying the dip here for BTC.
For the stocks, I’d stick to adding the stalwarts: COIN, GLXY, MARA, and MSTR (or STRK) and even EXOD.
I had a reader ask me about FLD (Fold App) – a credit card with Bitcoin rewards, after taking a look at the prospectus I’m hesitant. Yes, they have over 1,000 BTC in their own treasury, but when I looked at the income statement they have really really thin gross margins, which bothers me.
For now we can stick to our knitting, but there’s a couple others I am looking at and may add in the next letter.
More when that comes out, which could be after the weekend because I have to go out of town Saturday.
Overall – stay the course. This is pretty normal for a Bitcoin bull cycle, if you’re sitting on some dry powder and not sure what to put it into – just buy “the index” which is Bitcoin.
