Will institutional investors kill the four year boom/bust cycle?

[Husires]

The absence of a bear market means that we will witness a price bubble that will end with the desire of many to buy and then the sudden collapse in prices, which will make all investors poor.
I think that the recent increase was caused by speculation, especially with the decline of the dollar and the desire of governments for more stimulus packages, in short, searching for safe havens.

[1715649335]

1715649335

[Poker Player]

Actually today I read an article by someone named Dan Held ...
-snip
https://dailyhodl.com/2020/07/08/bitcoin-super-cycle-could-bring-btc-to-1000000-in-four-to-five-years-heres-how-according-to-dan-held/

I just read his twitter where he talks about it and I quoted him in the WO thread, but anyway, we should not forget that it is normal to see these theories in a bull market.

In a bear market these theories are either not said or go unnoticed. Having said that, I hope he is right.

If I have understood you well, you are saying that these parabolic moves up won't happen because institutional investors will help stabilize the market. So you are not so bullish as him

[Tmdz]

Actually today I read an article by someone named Dan Held ...
-snip
https://dailyhodl.com/2020/07/08/bitcoin-super-cycle-could-bring-btc-to-1000000-in-four-to-five-years-heres-how-according-to-dan-held/

I just read his twitter where he talks about it and I quoted him in the WO thread, but anyway, we should not forget that it is normal to see these theories in a bull market.

In a bear market these theories are either not said or go unnoticed. Having said that, I hope he is right.

If I have understood you well, you are saying that these parabolic moves up won't happen because institutional investors will help stabilize the market. So you are not so bullish as him

Parabolic runs still happen but the "crash" is limited on the downside as other people buy the dip and the run keeps going.

Look at the nasdaq, it has been in a bullrun for 10 years.  So btc could start looking more like a bull run in traditional markets and less like a dot com bubble such as in 2017.

[thecodebear]

Actually today I read an article by someone named Dan Held ...
-snip
https://dailyhodl.com/2020/07/08/bitcoin-super-cycle-could-bring-btc-to-1000000-in-four-to-five-years-heres-how-according-to-dan-held/

I just read his twitter where he talks about it and I quoted him in the WO thread, but anyway, we should not forget that it is normal to see these theories in a bull market.

In a bear market these theories are either not said or go unnoticed. Having said that, I hope he is right.

If I have understood you well, you are saying that these parabolic moves up won't happen because institutional investors will help stabilize the market. So you are not so bullish as him

Parabolic runs still happen but the "crash" is limited on the downside as other people buy the dip and the run keeps going.

Look at the nasdaq, it has been in a bullrun for 10 years.  So btc could start looking more like a bull run in traditional markets and less like a dot com bubble such as in 2017.

Yeah, essentially that.

The insane boom/bust cycle that has dominated bitcoin's market cycles in its first decade is driven by the emotional investing of the retail market FOMOing into something they just heard about and then panic selling when they see that thing they just heard about (and know nothing about) dropping in value.

Corporations and investment firms who do research and don't make an investment lightly, along with seasoned accredited investors, will not be creating such a volatile character in the market. And they will be owning the majority of the available coins in the next few years simply because they are the ones with all the money. The retail market will shrink as a percentage of the market from like 90% to something far lower, as will their ability to cause crazy parabolic runs and crushing crashes. We will still get fits of FOMO and panic causing big pumps and sharp corrections or mid-term downturns, but it is going to take years for institutional money to slowly work its way into what is still a very small asset - they could buy the entire bitcoin market cap dozens or hundreds of times over right now - so there will always be more institutional money wanting to get their hands on Bitcoin, and this will stop any crash caused by the increasingly less significant retail market. Corrections won't turn into long term bear markets anytime in the next few years.

Essentially, the "base" of the market will move up much quicker because of all the long term institutional money that is being invested for many years to come instead of to make a quick buck. In 2017, despite rising from $1000 to $20,000, the base of the market even by end of 2018 was only $3000, so that is where it bottomed. If the base this fall was $10k, it is quickly rising now. As an example, if we see price go from $10k a couple months ago to $200k at end of next year (like 2017), the base is going to be a lot higher than $30k, and continuing to rise in a correction as institutions buy up cheaper coins during the correction for long term holding, rather than panic selling what they already have. It would maybe result in a downturn for a few months and 6-9 months later it's back pushing new ATHs. And this will continue for the better part of the decade until institutions have gotten a few percent of their funds into Bitcoin, pushing the price to the $500k to $1 million range, not as a brief peak to hit before a crash, but as a well supported price by the second half of this decade.

[JimboToronto]

The insane boom/bust cycle that has dominated bitcoin's market cycles in its first decade is driven by the emotional investing of the retail market FOMOing into something they just heard about and then panic selling when they see that thing they just heard about (and know nothing about) dropping in value.

Corporations and investment firms who do research and don't make an investment lightly, along with seasoned accredited investors, will not be creating such a volatile character in the market. And they will be owning the majority of the available coins in the next few years simply because they are the ones with all the money. The retail market will shrink as a percentage of the market from like 90% to something far lower, as will their ability to cause crazy parabolic runs and crushing crashes. We will still get fits of FOMO and panic causing big pumps and sharp corrections or mid-term downturns, but it is going to take years for institutional money to slowly work its way into what is still a very small asset - they could buy the entire bitcoin market cap dozens or hundreds of times over right now - so there will always be more institutional money wanting to get their hands on Bitcoin, and this will stop any crash caused by the increasingly less significant retail market. Corrections won't turn into long term bear markets anytime in the next few years.

Essentially, the "base" of the market will move up much quicker because of all the long term institutional money that is being invested for many years to come instead of to make a quick buck. In 2017, despite rising from $1000 to $20,000, the base of the market even by end of 2018 was only $3000, so that is where it bottomed. If the base this fall was $10k, it is quickly rising now. As an example, if we see price go from $10k a couple months ago to $200k at end of next year (like 2017), the base is going to be a lot higher than $30k, and continuing to rise in a correction as institutions buy up cheaper coins during the correction for long term holding, rather than panic selling what they already have. It would maybe result in a downturn for a few months and 6-9 months later it's back pushing new ATHs. And this will continue for the better part of the decade until institutions have gotten a few percent of their funds into Bitcoin, pushing the price to the $500k to $1 million range, not as a brief peak to hit before a crash, but as a well supported price by the second half of this decade.

I posted this in a different thread but I think it's relevant here:

This isn't new. Here's something from 2013:

https://www.youtube.com/watch?v=qHUPPYzzZrI

If you watch the video, you'll notice that he points out the extreme volatility during the early innovator stage which smooths out as the s-curve goes vertical.

[exstasie]

Parabolic runs still happen but the "crash" is limited on the downside as other people buy the dip and the run keeps going.

Look at the nasdaq, it has been in a bullrun for 10 years.  So btc could start looking more like a bull run in traditional markets and less like a dot com bubble such as in 2017.

Yeah, essentially that.

The insane boom/bust cycle that has dominated bitcoin's market cycles in its first decade is driven by the emotional investing of the retail market FOMOing into something they just heard about and then panic selling when they see that thing they just heard about (and know nothing about) dropping in value.

Institutions FOMO and panic sell too. Here are some charts of my favorite precious metals market, rhodium:





The dotcom bubble is another vivid example of what happens in the "traditional" markets. In other words, the same thing as Bitcoin. It bubbles hard, it crashes hard, then it keeps going up long term.

Fundamentally, I don't think you can have extreme exponential upside without downside volatility. That doesn't mean all the gains will be lost (not at all), just that there is always a "what goes up must come down" effect as hype eventually wanes and investor fatigue and disappointment sets in. Richard Wyckoff would just call that a distribution phase. This dynamic is more about the emotional psychology underlying all market cycles than anything to do with Bitcoin itself, which is why we see it in all speculative markets.

[Volgastallion]

Really good one analysis and  correct in the teoric side, but he comes the empiric thing.

Its really good to read this posts after a long run and a few cicles like now.

And we had one really boom/bull cycle and a big bear market in terms of %.

So institutional hands until now only makes bigger the flow cash and some holdings but they didnt change so much the movement of the market and i repeat, UNTIL NOW. LEts see in the future if we can see some changes.

Asides of this, we see a bad side of the "institutional" when they make a mess they can drag the market with them.

Only to clarify i'm not criticizing your write because i also think in the same way as you, but with the news in the hand we receive a hand in the face of reality.

Also we cant discount a new black swan in the future, the earth its moving really fast this last 3 years, we cant see two months ahead in terms of economics.

After saying all this i think in the future we can see finally a most stable cycles not only for the institutionals but also because the market can have more mature.

[el kaka22]

Not really. I understand that they have a lot more money to actually change something about the market, but if you were a rich whale that could follow a pattern and make billions, would you want to change that at all? Why would you want to change it?

I think by 2025 they will know that it will go up, and they will buy before that a bit, accumulate slowly to not disrupt the market, and then make a ton of money, buying 1-5 billion worth bitcoin in 2 years is nothing, you could do about 20-30 million dollars a day, which will not be even felt, and you could have so many bitcoins, and that is how they will do it to make sure they can profit from this pattern.

[2double0]

1. Institutional investors are scooping up lots of btc according to the latest analysis. But there is also one fact that they are not selling just because they are diamond hands or whatever you'd call them, there is one more reason that they can't sell it entirely on the market because there is not enough liquidity on which they may dump their coins and they will least likely do it because that will not make them any profits. They are also not doing it because many major institutions are holding big leveraged positions in futures and these institutions are helping them to survive and not lose everything. Because if a retailer or group of retailers lose money, that won't make any impact but a news stating a big name lost their entire capital will surely bring enough chaos to create panic in markets and see a sell-off again.

2. General public will be less interested in btc because institutions are holding a big % of it and will keep the price steady and range-bounded (they can do that for years) and some big wallets will also be bought by these institutions only if they come out with their coins. However, general public's interest in alts will rise due to this because institutions are least interested in altcoins and still today, retailers are moving the alt markets so this is where their money will go.