The Unthinkable Is About To Happen

But anyway, [clears throat] serious talk. Look, the unthinkable maybe about to happen to crypto and uh you got a situation right now where everyone's bracing for the worst, you know, especially in stocks. Everyone's bracing for the big stock crash. Stocks are too high. You know, crypto's already run too much. We're still in a bare market. Bitcoin's still going to 40k. Got to take all the money out of the market. PTSD. Altcoins are never going to really go back to their all-time highs. Blah blah blah. You've heard it all, right? I You've probably thought it if you haven't heard it. But what if the unthinkable thing isn't the crash narrative? You know, because every bull market climbs a wall of worry. What if the unthinkable thing is that, well, nothing's actually broken at all and we're exactly doing what we're supposed to be. The market's actually healthy. Things are relatively fairly priced right now in this macro bull run. Still has a lot of room to run. What we saw in crypto was just a midcycle correction. Now, that idea sounds crazy right now. Slap me for even talking about that crazy [ __ ] but that's exactly why it deserves your attention. So stick with me because this is a very interesting narrative. Let's start with the stock market because crypto doesn't live in a vacuum. I know sometimes it may feel like lives in a vacuum or sometimes we have certain narratives that drive crypto specifically, but the fear right now is that stocks are catastrophically overvalued and about to fall off a cliff simply because they feel too high after a multi-year run. The prices are too high. Have you seen the price of Nvidia? Have you seen the NASDAQ? Have you seen the SP500? But feels too high feels generally are not data points. So, let's look at the actual data. The current stock bull run, it's about four years old. We have about 100% gains approximately. That sounds huge until you compare it to history. The average bull run lasts around 5 1/2 years and returns around 265%. So, by historical standards, this is a younger than average bull run and has gained less than average so far despite all the crazy [ __ ] that you've seen. Again, every bull market climbs a wall of worry. Right now, we are nowhere near what a blowoff top looks like. Yes, we have blowoffs in, you know, Micron and Sandisk and other stuff, very specific sectors. But why does this matter for crypto? Because crypto thrives in a riskon regime. And if history is any guide, markets should broadly stay riskon for at least another 18 months, potentially longer. That's the backdrop cryp crypto gets to play in right now. Do you want more evidence that we're nowhere near crazy town for the risk-on markets? Look at the IPO market. Bubbles are when every company with a logo and a pulse rushes to go public. In 1999 at the peak of the dotcom mania, there were about 460 470 IPOs, something like that. This year, IPO activity is decent. It's on pace for about 140 to 150 IPOs, but that's less than a third of the bubble peak. Meanwhile, earnings per share remain robust. Yes, EPS is good. Companies are actually making money. Put that together and you get something that the doomers don't want to admit. the people who short every [ __ ] thing in the market all the time, the Michael Burries of the world, a Goldilocks window for crypto is opening up right now. Now, here's where it gets interesting because crypto has its own version of the same sort of fear. And I think it's just as wrong. Crypto always moves in these sort of brutal cycles. You get the hope, you get the euphoria, you get the massive depression, you go back again. The question you have to ask yourself is pretty simple. Where are we right now? Because objectively, we're not in euphoria. Obviously not. Nobody's quitting their job to trade [ __ ] meme coins right now. you know, your shoe shine boy or whatever equivalent average job person isn't pitching altcoins right now. The mood's anxious, skeptical, it's exhausted. People don't want to believe that this is going to reverse despite all the technical and onchain evidence. That's not what the top of a cycle feels like. This is what really the beginning of a cycle feels like to be honest or let's say the reversal of a midcycle crash, right? And here's the thing that should probably get a little bit of your attention to the dry powder is still sitting there. Total stable coin supply is holding strong, roughly $310 billion. Think about what that means. Capital hasn't fled out of crypto to go park itself in treasury bonds somewhere. It's parked on the sidelines in the crypto ecosystem ready to deploy. People who were truly done with this asset class would have cashed out the money to their bank accounts and walked away. They didn't. They're waiting or they're deploying. And when they stop waiting or when they start deploying more, the money moves fast. We saw that uh recently when we had that big move a few weeks ago. So, if the market isn't in a bubble and liquidity is still here, what drives the next leg? We want to break down the pillars of that. Pillar one is the institutions. Crypto is no longer just a retail casino fueled by internet memes. I mean, it's still got that going on, but has graduated in into an institutional asset class now. spot ETFs, corporate balance sheets, tokenized real world assets or anchoring on capital onchain in a way that's much stickier than the just pure retail hype over memes and stuff ever was. The infrastructure itself is shifting from experimental code to enterprisegrade settlement rails. That's not a narrative. That's plumbing. Plumbing doesn't get ripped out because a bad week on Twitter. Okay. The second pillar is onchain economic reality. And you have to look at that over top of the speculative noise. Okay. You see the geopolitical headlines, you see the FUD, you see the short-term liquidations. This all makes for scary thumbnails and, you know, great doom posts on Twitter, but they don't drive multi-year trends. What does? Well, the same thing that drives stocks, cash flows. In crypto, that means protocol revenue, fees, DeFi volume, throughputs, real world tokenization, all of which is happening at record levels right now. The market is increasingly rewarding protocols that generate organic yield that handle massive volume and power high throughput execution layers like Salana. Tokens with real buyback mechanics or genuine utility are starting to look a lot like equities with cash flows. Don't tell the SEC I said that, by the way. They won't want to hear it. I think more broadly is a a sign of a maturing market, not of a dying market, not of a market that has to go through extreme more months of intense [clears throat] bare market pain and destruction and pessimism and blowing things up and everybody's got to go bankrupt and [ __ ] [ __ ] [ __ ] Bears stink. They're gross. They're dirty animals. They eat carcasses. Bears. You want to be a bear? No. Bulls are awesome, man. They got giant Johnson's. They got big horns. I mean, why would who wouldn't want to be a bull anyway? Pillar three is liquidity. This one's simple. Crypto is the ultimate high beta sponge for global liquidity. When monetary policy shifts, when central banks ease, when stable coin supply expands, when the Treasury is buying back billions upon billions of bonds, [laughter] throwing buckets of fire onto the forest fire. You know, look, capital floods into digital assets, spills over every time. Macro liquidity gives us the fuel. Right now, it's all lining up. Hey, real quick. What used to take dozen tabs, hours of scrolling, 10 minutes thanks to the inner circle. Come try check it out. Act now full and now it takes like an every day you don't have it, you're trading blind while others aren't. The inner circle compass is our custom set of tools attached to our private community. You also get private community access. This gives you regime structure. It gives you live signals. It gives you trade signals. It gives you full intelligence reports twice a day, curated Twitter feeds from high signal accounts. It gives you my portfolio breakdowns. You get access to our AI agent where you can plug any crypto coin in and it'll give you a full breakdown, sentiment analysis, charts, and much more. Plus, Discord access, private AMAs, trade of the day, so you're never sitting on the sidelines wondering what to do next. The gap between you and the signal closes the moment you join. Link down below. You get a 7day free trial. Come try check it out. Act now. And the fourth pillar, this is where most people lose all their money even when they're right about the direction. You see, trading short-term volatility, trying to snipe local dots, most people are usually on the losing side of that equation because they're up against market makers and algorithms that are faster, better capitalized, and just simply don't have emotions about the whole thing. So, the real asymmetric upside in crypto, long-term positioning, and you're at a very interesting time in the market right now for long-term position. When I say long-term positioning, I don't think there's anything that's worth investing in on a a time frame over a couple years besides, you know, maybe Bitcoin, Ethereum, Salana, okay, to be clear, the rest of it trades, right? But they're longer term investments for crypto. We're not talking about day trades of random meme coins. We're talking about things you can buy now and sell in the next 18 to 36 months for hopefully much higher prices. That means identifying the structural technological shifts, things like AI crypto compute networks or the what dexes are going to be popular, okay? And finding the hot narratives and writing them and accumulating them systematically, not all at once. And you don't need to use leverage uh for these spot positions. Now, here's the thing. The mindset of all this is important. So many people try to get rich overnight with meme coins or with like super high leverage day trading and stuff like that. You see how I trade, you know, I do a couple trades a week, maybe three or four trades a week. Never use more than uh three 4x leverage. That's it. Very boring actually, but it works. Does does the job most of the time. The strategy of high leverage, memecoin degeneracy, all that stuff. Very high body count. Very few exceptions for people who win. But if you switch to a getrich slow accumulator mindset, your chances of winning is very very unexciting, very unsexy. But your chances of winning are extremely elevated by comparison to the person who's, you know, blowing up every day. He's all stressed out, losing all their [ __ ] money all the time. Also consider this as a value proposition. Buy better [ __ ] How about that? Ah, really? Instead of buying, you know, dog in you number 97, focus your capital on, you know, decent assets with deep liquidity, proven network security, blah blah blah, real economic value. There's a lot of them out there. Now, new coins are launching all the time. You can buy new coins. Okay, that's fine. But there's a lot of older coins that are sitting 50, 60, 70, 80% below their previous all-time highs that are probably pretty interesting buys at this point. They've got it all. They got the exchange listings. They've got better tech. They never had all kind of stuff. They're just exiting a bare market. So, people don't believe yet. you can. Now, the people who panic sold at the bottom of every past cycle all had one thing in common. They were sure it was over. They'd sure they'd missed it. They were sure that this time was different and that we were really going to go to zero this time. And I've never believed that once. Never during any bare market. We're never going to zero. Okay. Bare markets are tough. The good news is the worst is behind us and we seem to be entering a new bull market cycle. But you have to get over the PTSD and actually allocate and be ready. Okay. Now, a final thought here, okay, before I uh end this segment, I wanted to show you this uh chart real quick because I think it tells you where we are and what you need to know most importantly about the the current status of the cycle. Okay, this is the total crypto market. Uh this is the others chart. So, all the coins excluding the top 10 twoe chart, very high time frame. El Crypto Prof posted this said, "Why is nobody talking about the fact that total two has broken out of a multi-year downtrend? We're currently seeing a retest. Exactly the same scenarios back in 2016 and 2020. Third altcoin bull market in history is only just getting started. So you can see phase one, okay, accumulation phase, tightening phase. Here we go. Another phase one. Well, this phase one was extended because of the copper gold ratio extension, because the ISMPI from manufacturing extension, all that kind of stuff. Okay, guess what we're getting ready for after years of contraction? We are getting ready for expansion. Now, a historically long contraction doesn't mean a historically long expansion, but it could. We'll find out, I suppose. Regardless, the next 18 to 36 months are probably going to be pretty gosh darn interesting if you're holding altcoins. Every week, 100,000 people get the trade idea before the crowd does. You could be one of those people for free. Or you can find out after the move has happened after it's already played out. The Lark Davis newsletter delivers a trade of the day, a chart of the day, a market moving alpha section directly to your inbox. All the latest news, what you need to know as an investor in these markets. Timed to get ahead of the action, not react to it. It's free, it's fast, and it's the one habit separating traders who catch moves from traders who chase them. Don't be the one asking, "Why didn't I know about this?" Join the Lark Davis newsletter today. It's free. Link below. Go get it.