Btc crash cycle

Bitcoin Bull Run: OGs on Why This One’s Different

Think back to 2017. Crypto was everywhere. The celebrities hawking ICOs included DJ Khaled, “Floyd Crypto Mayweather” and longtime blockchain enthusiast Paris Hilton. The most watched comedy on television, “Big Bang Theory,” named an episode “The Bitcoin Entanglement.” Long Island Iced Tea made the world’s most natural pivot, rebranding itself as Long Blockchain Corp. (The stock jumped 200%.) 

And now? Crickets. Even though the price of bitcoin seems to break a new record every five minutes, erupting from $4K to $40K in less than a year, for some reason this bull run feelsdifferent – not as mainstream, not as talked about, not as Paris Hilton-y.  

So is it really different? There are many ways to measure a bull cycle. The most obvious is by looking at the price, another is to look at things like the frequency of “bitcoin” in Google searches and a third is to evaluate the technical and fundamental metrics – smart analyses from the Nic Carters and Willy Woos of the world. 

But then there’s the qualitative side. I wanted to find out how the bull run looks – how it feels – from the perspective of OG bitcoin hodlers. And if this cycle is different, why? And where are we headed?

Let’s start with the kid.

When Erik Finman was 12 years old, his older brother took him to a “very chill protest” in Washington, D.C. This was in 2011. Finman happened to notice a guy wearing an orange shirt that had a big B in the middle.

“What’s that?” the 12-year-old asked.

“It’s bitcoin, man. It’s going to end Wall Street, bro.”

So the 12-year-old looked into this bitcoin thing. He grew curious, and so did his older brother. His grandmother had just given him $1,000. (She thought she didn’t have much longer to live, so she gave checks to all of her grandchildren.) He tried to give it back. His grandma wouldn’t take it. The check was supposed to go for a scholarship fund but instead the kid used it to buy bitcoin. The price of each coin was around $10, so he bought 100 bitcoin. Thanks, Grandma. (Happily, her health improved. “She’s actually my only living grandparent now,” says Finman.) 

See also: Jeff Wilser – Cathie Wood: Ahead of the Curve

“Bitcoin became an obsession,” Finman remembers. While the rest of his friends were into Call of Duty or Pokemon, the 12-year-old hustled to get more BTC, texting with strangers to buy and sell. “I felt like a Wall Street broker.” He would eventually cobble together over 400 bitcoin.

You know those dot-com wunderkinds who drop out of college? That’s nothing. When Finman was 15 he dropped out of high school. Since then he helped start the crypto payments company Metal Pay, built a real-life Dr. Octopus suit (inspired by Spider-Man), and launched a satellite with Taylor Swift. (It’s easy to connect with T Swift, says Finman. “IMDBPro lists everyone’s agent; it’s only $30 per month, and the agents check their email.”) 

During the frenzied 2017 bull run, the media couldn’t get enough of the Teenage Bitcoin Millionaire. The Guardian photographed him sprawled over a pile of cash, wearing sunglasses, a hundred-dollar bill sticking out of his mouth. GQ covered his streetware. But guess who also consumes the media? Hackers. They spotted a rich target and came for his digital gold. “I was sick to my stomach,” says Finman. “I got emails that threatened to kill me if I didn’t give them bitcoin.” They also threatened his parents, even mentioning them by name along with their work addresses.  

“I was terrified to walk on the sidewalk,” Finman remembers. He had insomnia for days. The worst of it came on Aug. 21, 2017 – the day of the eclipse. Hackers knew that everyone would be staring at the sun and away from their computers, so they chose that precise moment to pounce. Erik watched the eclipse like the rest of the world but he happened to get tired of it a little early,. He returned to his computer to see crazy flickering and movements on his screen. Oh s**t, he said to himself, and somehow he booted them from his system just in time. (Amazingly, he didn’t lose any crypto to hacks, but says his email and Twitter were compromised for months.)

And now, his life in the current bull run? There are no calls from GQ. No fawning from The Guardian. Finman has a theory for why this cycle feels so under the radar: The cultural space that was once occupied by crypto is now gobbled up by politics and the coronavirus pandemic. 

“[Donald] Trump gets more clicks than crypto,” says Finman. He thinks of the earlier bull run of 2013 as a “golden era,” not just because of the wealth creation but because “you could talk about things other than politics. Back in the day, cool young people were doing cool things, and building cool s**t. I feel like that has been lost.” 

He misses going to parties and talking about new apps and crypto, instead of Trump and pandemics. “Maybe [President-elect Joe] Biden’s not as interesting as a person” and “he’ll get less clicks,” says Finman. “Maybe bitcoin is more interesting than Joe Biden.”

Finman and I spoke weeks before the mob of Trump supporters invaded the Capitol, but that wrenching day of Jan. 6 seemed to encapsulate his point. While most of the nation watched, horrified, as chaos engulfed the nation’s capital, which perhaps said something dark about America, the price of bitcoin surged another 10%. This is perhaps the great irony of blockchain in 2020 and 2021: the raucous celebrating of bitcoin, juxtaposed against so much real-world suffering (nearly 2 million deaths from the coronavirus) can seem tone-deaf. 

As much of the world grieves for the dead, struggles to pay rent or simply tries to make it through the drudgery of quarantine, many of the bitcoin bulls whistle a different tune. “2020 was an excellent year!” tweets a cheerful crypto investor. Another gushes that “2020 was a hell of a year. I’ve never seen a market like it and I’m fortunate to have closed it on a high note … Not only did I finish at all-time highs, but #Bitcoin has finally given me a clarity that I’ve been seeking for awhile. 2021 should be special.”

ii. 'Not yet interesting enough.'

Erik Voorhees, the CEO of ShapeShift, has also been around since near the beginning. He takes us down memory lane. In 2011, the price hit $31, then the bubble popped and it would crater to $2. These were dark days for bitcoin. “Everyone who was skeptical had every reason to believe that it was over,” remembers Voorhees. “All the people hating on bitcoin had a field day for months and months.” The next bull cycle wouldn’t come for another two years, in 2013, when the price again cracked $31. Voorhees remembers giving a talk at New York University with Charlie Shrem, and during the talk the price pumped $5 as they celebrated. “All of the students thought we were a little weird.”

Voorhees has a contrarian take. “It mostly feels the same,” he says. “When you go through several seasons of this market, it feels the same. You have this crazy bubble and then a period of denial after the bubble and then a dark bear market for a while and then a period of stabilization and then another period of growth. That cycle feels very natural to me.” Voorhees says you can’t predict how high it will get or when it will crash, but the overarching patterns feel consistent and predictable. 

But does the actual price history bear this out? Let’s go to the graphs. When you first look at a chart that displays the history of bitcoin’s price, these patterns are hard to spot. It looks like bitcoin is worth peanuts for years, then you see the to-the-moon bull run of 2017 then the crash and now today. Many traders look at it differently. They switch the scale of the chart to logarithmic, which basically plots the percentage changeof the price. 

For example, a jump in price from $1 to $1.1 is a 10% gain, just as a jump from $10,000 to $11,000 is a 10% gain. Both of those jumps would give an investor the same rate of return, so they’re displayed the same on the graph. And when you switch the chart to logarithmic, suddenly you do see the patterns. In fact, it’s easy to see. You see the bull and the bust cycles that repeat several times over the last decade, and you see that each time bitcoin “crashes” the new level is higher than the prior cycle. Looked through this prism, $40K prices look less like wild, uncharted territory and more like the smooth continuation of a decade-long trend. (If you squint.)

As for why we don’t see the same breathless media coverage and why bitcoin is not in the larger cultural conversation? “That’s a simple answer,” says Voorhees, and then adds a slab of juicy red meat for the bitcoin bulls: “We’re not in the real bubble yet.” His logic is that, yes, bitcoin has surpassed its previous ATH, but while “everyone in crypto is freaking out and excited, because they’re like, ‘Yes, we’re back!’” – and while it prompts daily articles from CoinDesk on each new tick upwards (such as $27K, $28K, $29K) – this is not yet interesting enough to curry much mainstream fascination.