Stop Waiting for a Recession To Cause a Crypto Crash — It’s Already Happened, and It’s Already ‘Priced In.’

Here’s how you get ahead of the crowd and prepare for what’s next.

Macroeconomic wizard Raoul Pal says, “By every indicator, we’re in a recession already.”

The economy will have very little impact on cryptocurrency prices because they’re already priced in.

In an election year, it’s not surprising politicians have gone radio silent about the health of the economy.

If you go back 90 years, both equity and bond markets had more muted performance in the year leading up to a presidential election than at any other time.

Raoul Pal argues that high debt won’t crash asset prices because interest rates will eventually hit zero, re-stimulating the economy.

No government will allow the private sector to crash, so they’ll just print more money, increasing the debt burden, meaning prices will increase optically in line with the level of borrowing.

The one thing everyone is missing with this current cycle is they’re treating Cryptocurrencies like the traditional equity market without realising that Crypto trades 6 to 9 months ahead.

So, rate cuts and an inevitable recession announcement are likely already factored into the price.

Let’s dive into the potential scenarios and what to do next.

Be prepared early and avoid jumping onto a moving train

Trying to catch a moving target was exactly what I shouldn’t have done when I dipped my toe into Bitcoin and Ethereum in 2017.

I bought into the hype of what people were talking about in mainstream media, and by that point, it was far too late.

I was late, but I also lacked the conviction I now have. I didn’t deploy nearly enough money into those assets because I didn’t have the education behind me.

My 24 Ethereum skyrocketed, multiplying by 30 during the 2021 bull market, turning initial excitement into regret about the missed opportunity.

When you’re Helter Skelter and chase results, you make irrational decisions — you think far too short term and do stuff like “buying the top and selling the bottom”.

50% corrections make your stomach churn when it should signal you to buy more of the asset you have conviction in.

Don’t be that first person (2017 me). Have a game plan and a systematic framework that removes your emotions.

Never use leverage because it messes with your sleep lol, have a long-term time frame to keep you patient, and always play with money you can afford to lose because it takes the pressure off.

Grab a drink, buckle up and let’s dive into it because this gets juicy.

Authors Note: Always self-custody your assets. Crypto exchanges are like the Wild West. I use a Ledger hardware wallet and sleep like a baby knowing a Sam Bankrupt Fried-esque character can’t use my funds as their personal trading account.

If you’re sat back waiting for the market to crash, you’re making a huge mistake.

People I speak to say, “There’s a recession coming — everything is about to dump.”

Ryan Holiday said it best — “People apply old habits to new things”.

Like when TV came out and we used to film people on the Radio. Or when websites came out, people pasted their company’s brochure to their landing page.

It’s what everyone is doing with this current cycle by treating Crypto like the traditional equity market without realising that its speculative nature means it naturally looks ahead and what might happen.

It differs from the expected reaction of the stock market to daily or weekly news trading.

Below is a chart showing where we are — an uncomfortable number of macro traders say this is the start of a new cycle.

When you factor downward pressure on inflation from 7.7% to 3.1% and interest rates poised to pivot lower, it signals that stimulative effects are on the horizon.

The Crypto market appears to have already priced this in.

Boosted liquidity benefits the crypto market. Just look at what people did with the influx of pandemic cash — we invested in Dog coins and digital monkey images.

The total market cap has now crossed $1.5 trillion. (We’re back)

Start with this mental framework first.

Having some direction or blueprint helps you navigate in the dark. It took so much guesswork out of everything when I understood this.

Raoul Pal calls it a “Macro-secular trend.”

Understanding this gives you a head start and helps you understand when and why everything returns bigger.

I’ll keep this straightforward to understand.

In 2008, when everything bottomed after the housing crisis, Interest rates went to zero, we turned the money printers on, and Bitcoin was born out of some archaic know-your-customer and anti-money-laundering rules.

Programmed approximately every four years into the Bitcoin protocol is a halving event that halves minors’ reward and reduces the supply.

Several of these factors mirror each other in timing.

In 2008, we experienced a convergence of events at the bottom of the business cycle. The liquidity cycle started with government stimulus injections, debt refinancing at 0%, and a presidential election (Obama defeating McCain) that all mirrored each other.

Now, we’re heading to a new cycle.

The last thing holding the crypto beach ball underwater is the Bitcoin halving event, which, you guessed it, mirrors all of the above (due April 2024).

It’s all about to reach a climax.

To throw more wood onto the fire, 30% of America’s outstanding debt amounts to $6.7 trillion, which will be refinanced in 2024. It means they must print more money to service the debt, which has further stimulative effects.

It’s excellent for Crypto but turning the dollar into toilet paper.

In his quarterly report, Jamie Dimon, Billionaire chairman of JP Morgan Chase, says, “It’s the most dangerous time the world has seen in decades”.

Ray Dalio, one of the most outstanding hedge fund managers ever, says, “You can’t keep spending money and expect inflation to come down because when you restimulate, asset prices go back up again”.

Government debt will likely keep growing because paying off the existing debt with high-interest rates will cost more.

As debt keeps rising, Dalio says, “Governments will need to sell more debt, so there will be a self-reinforcing debt spiral that will lead to Market-imposed debt limits. Central banks will be forced to print more money and buy more debt as they experience losses and deteriorating balance sheets.”

When the money printers get turned on, it directly impacts Crypto prices. As you can see from this logorhymic chart of Bitcoin vs M2 money supply, they shadow each other precisely.

M2 represents the total money in circulation, and when this number rises, Bitcoin (BTC) tends to go up.

You have a 4 to 6-month golden opportunity (before it’s too late)

Whenever I develop a thesis, I look for a macroeconomic expert and other investors for safety signals.

I also try to kill my own ideas by listening to people I disagree with.

Mark Yusko co-founded Morgan Creek Capital Management in 2014 when Bitcoin was still flying under the radar.

CEO Yusko took a brave step by putting some of his company’s endowment into Bitcoin. He did it while most old-school folks were still on the fence.

Yusko believes you’ll witness exponential prices due to the demand of the halving event. It’s a predetermined event programmed into the Bitcoin protocol that reduces the rate at which new Bitcoins are created and added to the system.

The number of new Bitcoins created as a reward for mining reduces by half, significantly impacting the supply available in the market.

Yusko and Raoul Pal hold similar views of comparing where we are to the seasons.

Pal says we’re in Crypto spring, and here’s what people do when it’s springtime.

Raoul Pal — Source

“When you’re in crypto spring, and there’s uncertainty, you go to the safest, most secure, most known asset, and the most liquid, which is Bitcoin.

Then you tend to spill out, and you see Ethereum start to catch up. But as people become more confident in the cycle itself, you see it spread further out of the curve, and you’re starting to see that already.

I mean, Solana had a huge run this year. There are a few things that have had a huge run. It’s not consistent yet, so, commonly, Bitcoin dominance falls.

It’s the same in the credit market. People buy treasuries first, then they buy corporate credit, then they buy junk bonds, then they all blow up, and we start all over again.”

Yusko is adamant investors have a golden opportunity in the next 4 to 6 months to gather as much Bitcoin and cryptocurrency as possible before he anticipates a phase of parabolic price increases and exponential growth.

Mark Yusko — Source

“This is the genius of the halving. It creates price movement because the price needs to adjust to reward the miners.”

Yusko says that with each halving event, the price of Bitcoin has increased by ten times (I verify this later on)

“With each subsequent cycle, it results in a 10x increase, effectively adding another zero. The progression has unfolded from 100 to 1,000, from 1,000 to 10,000, and this time around, from 10,000 to 100,000. Subsequently, the next following halving could propel the value from 100,000 to 1,000,000.”

Here’s How You Get Your Strategy Right

I have put six years into my own personal Crypto education and have seen the ups and downs of what buying the top, selling the bottom and using the money I couldn’t afford to lose brought to my mental health.

Data scientist and cryptocurrency genius Ivan Liljeqvist has a simple entry point strategy.

Here’s the strategy:

Before the Bitcoin halving event, be bearish and risk-averse but bullish and more aggressive soon after the halving.

He says to dip your toe in slowly with a Dollar Cost Averaging strategy but to “shift gears to a bullish and more aggressive approach after the halving” (April 2024).

If you’re new to Crypto, Ivan says to take the time now in the lead-up to the halving to build your capital and education in Crypto, which will help you manage this cycle effectively.

Now is NOT the time to be greedy because we’re still in a sideways market, so you have time, but you mustn’t get to the halving event as a “newbie”.

Be educated. Have capital ready to invest. Be bullish and take risks after the halving.

Past halving events provide insight into the potential outcomes for the upcoming one due on April 17th, 2024.

I tracked the price movement after each halving event, and it is evident that having a bullish strategy following the halving is highly logical.

The evidence highlighted in green below strongly supports this approach.

Final Thoughts.

All of the signs show that we’re entering a new bull market, and you must be prepared and not wait until the last minute to dive onto that runaway train without a plan.

Be prepared and be early.

Now is the time to dip your toe.

Yes, it’ll be choppy — you might even buy some cryptos that’ll retract by 50%. You also may not have purchased the very bottom.

Who cares, it doesn’t matter.

What matters is that you are ahead of everyone else with positions in blue-chip cryptocurrencies that you self-custody.

This time, be the one who’s early.

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This article is for informational purposes only — it should not be considered financial, tax or legal advice. You can consult a financial professional before making any significant financial decisions.