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