We're Probably Not in a 'Crypto Winter'

But We Are Likely Close to a Great Depression

Because of the nature of my work, I hear and read the term “crypto winter” far more often than I’d like to over the course of the day.

I resent the fact that the MSM loosely throws this term around because I remember how truly bleak and unamusing the crypto winter of 2018-2019 was.

Also, during that crypto winter - an actual crypto winter (whatever that means) - market index-pegged ETFs didn’t find themselves stagnating alongside crypto.

Take a look at the QQQ and the SPY from 2018-2019 below. (Don’t remember what QQQ and SPY are? Check out the last edition of the newsletter.)

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Now, compare those to Bitcoin (BTC) and Ether (ETH).

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Lot less upward price action with crypto - especially with ETH.

That was a prolonged period of boringness and sadness - and it lasted about two years. I know because I was there - when it happened. (For you, Tom; Happy 40th!)

We’re only about seven months into this downturn, so, please, let’s cut it with the “crypto winter” SEO plays, and let’s put our heads on straight.

We’re currently experiencing a massive downturn in all markets.

James Wang @draecomino

Every social media company other than Facebook is trading below its IPO price.

And, yes, I know, crypto markets fell oh so much! The drama! For perspective on market trends since March of 2020, I’d advise reading this piece I wrote entitled “Reframing the ‘Crypto Crash’” for Nasdaq’s website if you haven’t already.

The point I’m trying to make is that we’re still in a macro uptrend for risk-on assets - including BTC and ETH (though, we might not be for long). (Again, see the last edition of the newsletter.)

When the the prices for risk on assets break the light blue line in the chart below, then you can start clutching your pearls and praying to the Sweet Baby Jesus.

Bracco ⚡️ @Braczyy

$QQQ Sitting on a 13 year long term trend line that hasn’t broke yet 270 is a very important level to hold Been watching this chart for a while now. Tells the whole story

Because when that line breaks, here’s where we’re going…

Balaji Srinivasan @balajis

In a sense, the economy has been fake for decades. It’s printing, it’s social security insolvency, it’s the debt-to-GDP ratio. Eventually the bill comes due. One scenario for a grand finale: printing, followed by inflation, shortages, and attempted seizures. Then, real conflict.

Do I want that? Not at all.

Will it definitely happen? No.

But it might, and it’s best to be prepared if it does.

I’m not sharing the above information to scare you, but more just to bring to your attention where we might be at.

As I wrote in this guest blog post for the Australian site ValueWalk,

“Survival is in style right now. Aping into risky assets is so last year.”

Do with that info what you will.

Again, my humble suggestion is don’t try to be a hero. This isn’t GI Joe time. This is make sure you can feed your family time.

Let’s move on to a lighter topic...

DJ Pauly K on the Ones and Twos

Cameron Winklevoss @cameron

I’m having deja vu watching Mr. “I was wrong about inflation” dismiss the recession. Krugman is perhaps the most intellectually dishonest “real expert” out there. Of course corporate media continues to give him a platform to spread misinformation.

Jesus Cristo, do “experts” like this guy get my blood boiling.

Less antagonism, Frank. Less an-ta-go-ni-sm.

[Clears throat]

It’s okay that Paul Krugman was wrong about inflation. We all make mistakes sometimes.

[Deep breath… loud, forceful exhale through nostrils]

Some of My Recent Pieces

I wrote a piece on behalf of Finder for Nasdaq’s website entitled “Safety First: The Importance of Using a Crypto Hardware Wallet”

In it, I discussed how learning to self-custody your digital assets is one very important dimension of risk management in crypto.

And then I co-authored this piece entitled “Best crypto wallets” for Finder’s site.

(Maybe I’m trying to tell you something.)

Let the Dovish Talk Begin

unusual_whales @unusual_whales

Elizabeth Warren has said: The Fed’s aggressive interest-rate hikes risk triggering a recession.

That’s all, friends.

This wanksta right here is about to go watch an episode of The Bear (on Hulu).

Big hug. Stay safe.

Best,

Frank

Twitter: @frankcorva

Currently Listening To: This queen-y below. (Remind me about how I didn’t get tickets to see her when she played Bowery Ballroom in NYC this past January. No, actually don’t; I’m still angry enough thinking about Paul Krugman.)

Speaking of that Bowery Ballroom show…

Lyn Alden @LynAldenContact

US broad money supply has been flat year-to-date. It's the longest stretch of non-growth in the broad money supply since mid-2009, and before that, mid-2003.