Is crypto in a Super Cycle? First, let's examine what a crypto Super Cycle is. Super Cycles are typically noted within the commodity industry as upswings and downswings that can last decades or a few short years. Why do Super Cycles exist? Mainly because of supply and demand.
A commodity Super Cycle is characterized by the abrupt and lengthy rise of industrial commodities such as oil, metals, livestock, and agriculture over time until prices rise toward a peak, and then cause a contraction toward the eventual trough. Crypto hasn’t fully met mass adoption and more institutions are looking to come on board with Bitcoin. This will usher in a new wave of cycles that will last for years. Nonetheless, in Super Cycles you can see a period of bullish movement that can last for decades, followed by bearish movement lasting years as well.
The good news is that Bitcoin is within the first stages of a Super Cycle. This Super Cycle is shaping up to be an epic rally due to supply and demand being engulfed through institutional buying pressure. Fiat currencies are losing value daily, which in turn will be the catalyst for why we are headed for a Super Cycle.
Let’s examine the stock market briefly. From 2008-2020, the stock market saw massive growth after having a sharp decline in 2008. During that time, we considered stocks to be in an upswing super cycle. However, our economy is fragile after the COVID-19 setback. There is a large chance we could start a downswing Super Cycle that could last for years. If this were to be true, we can expect a crypto Super Cycle to emerge.
Essentially, a crypto Super Cycle will last for a few years where you will see steady growth. However, that doesn’t mean crypto wont see significant pullbacks along the way. As it stands, my Super Cycle metric is based on assets being 3 times higher than the previous all-time high. For example, Bitcoin's all-time high was a little under $20K. As soon as Bitcoin hit $60K, it started its Super Cycle. From there, we expect to see Bitcoin continue to break all-time highs.
How can Super Cycles help us as investors? Our focus should be to accumulate as many assets as possible, because earlier investors are supply driven. Once we have the supply, we then sell into demand. The longer an asset remains out of a Super Cycle, that is a sign that you have another opportunity to accumulate. It’s difficult to build wealth in a bullish market. Wealth is built in bearish markets or consolidated markets that haven’t yet moved sharply to the upside.
The good news is that we are at the start of a bullish Super Cycle and we have plenty of fuel left in the tank. Buckle up for the ride.