A Bull with a Bicycle

March 21, 2024

Baseball fans likely remember the story of a young Babe Ruth in 1932, pointing deep into center field only to subsequently hit a home run right to that very spot. It’s legendary, and look, it takes something to stick one’s neck out. No surprise, we’ve been pointing over the fence as well in anticipation of this bull cycle. It’s is nice that it’s unfolding and, wow, if ever there was a time expectations have been far exceeded, it’s now. This bull cycle is shaping up unlike any other. Let’s dive in.

 Up, Up, (down) and Away!

Let’s start with bitcoin. Bitcoin began the year at roughly $44,200. Since then, it has surged and broken all-time highs, reaching a peak of approximately $73,000 earlier this month and posting a record one-month gain of $18,600 in February this year. Of course, nothing goes up in a straight line and, sure enough, just this week we saw a 16% correction with prices going as low as $61,000. As I was preparing to write this, I was thinking to myself, “hmmm… I should probably address this pullback” as I have received inquires about whether the run was premature, over, or just fantasy from the get-go.

It’s not. Certainly, there is volatility and, certainly, that’s par for the course. For example, in the last bull run we saw 30% drawdowns five times… so a 16% drawdown in a crypto bull run is part of the norm and should not be surprising – in fact it’s kind of accepted. To emphasize this point, Anthony Pompliano called this pullback “A Drawdown For Ants” (for those that got the Zoolander reference, Bravo!)

The fact is, there is going to be volatility. There are going to be pullbacks. There are going to be profit takers and, heck, we need them in order to have a healthy market. What’s important is to keep our eye on the prize. And for us, that means that we’re expecting to see bitcoin around $150k – $200K by the end of 2025 (And, there are many that think we’re way too conservative).

Point being, the rocket has launched and, while enjoying the ride, please don’t let the volatility become noise. We’re moving on up and have quite a ways to go. To that end, even as I write this bitcoin has just surged to just below $68,000 posting a 10% intraday gain after the FOMC announced they still expect three rate cuts this year.

So, my answer to is it false? Is it over? Friends, it’s only just begun. And everything is different this time around.

Expectations Exceeded

Of course, a big part of this is the approval of the Bitcoin ETFs. I’ve spent way too much time on this topic over the past few blogs, so let me just put a footnote here. It’s not just “Mission Accomplished.” The Bitcoin ETFs have far and away exceeded all expectations, and that is driving this run.

Galaxy Asset Management predicted before approvals that we’d see the ETFs with inflows of $15 billion during 2024. That would be the whole of 2024, and across all of the ETFs.

Well, we’re a bit beyond that, with inflows currently at approximately $30 billion so far. That’s just in the first 9 weeks since approval, with Blackrock’s iShares currently at $15 billion in AUM and Fidelity right behind at $9 Billion. These are the two most successful ETFs in the history of…. history. This has created a dynamic that is unprecedented and has changed the cycles we are seeing. Which then brings us to another thing that makes this run different…bicycles…!


I talk a lot about Bitcoin because it’s the granddaddy of all crypto. In markets, it goes first. It’s the most accepted. It’s money (and we all seem to like money.) However, as noted in last blog, investing in innovation is always where the biggest gains come from. Bitcoin, at this point, is getting normalized and is well along on the adoption curve. They days of 68,000,000% percent gains are over. Therefore, the real growth, the real gains from this point forward will not be from bitcoin, but from innovation in the blockchain space, from products that are not nearly as far along on the adoption curve. These include blockchains that actually serve a purpose and do things such as allow the building of decentralized applications, facilitate decentralized finance, open the doors to the metaverse, implement AI, etc. These chains all tend to have their own coins which, being non-bitcoin, are referred to as “Altcoins.”

To be fair, from our purview at Tradecraft Capital we’re really not interested in most of them. Of the approximately 10,000 out there, most of them are hyper speculative or simply competing in a crowded space and we believe will not survive. However, just like in the early days of the internet, there are innovation assets that are groundbreaking and that we really do like. These are the assets that we are keen on, and that we expect would significantly outperform our beloved bitcoin.

History supports this and, generally in each bull run, there are actually two cycles that run in sequence. The bitcoin cycle, which goes first, and then we have “Alt-Season”, where the non-bitcoin crypto assets have their day. Alt-Season, historically, is after the Halving and occurs in the back half of the bull run, so in this case, we would generally predict it would be later 2024 and 2025. However this one is different.

Here are the mechanics and how this has occurred in the past. Generally, as in the previous bull runs, we’ve seen bitcoin make large moves first just like it is now. What then tends to happen is that crypto-native investors take their profits and move into the alternative crypto assets to multiply their gains. You can liken it to perhaps a market-wide sector rotation, and it’s been pretty consistent. It involves money, like a surfer, riding one wave then moving to another. This cycle, however, is different. Because of the success of the ETFs, we have bitcoin’s price being driven up early and by institutional (non-crypto-native) money. This has led to a huge run where we’ve actually broken all-time highs before April’s Halving event (discussed below.) This is something that has never happened before. This is the first indication of how this run is different.

The reason behind this is that we have new money, non-crypto-native money, driving bitcoin’s price via the ETFs. This is good news for the crypto-native investors, as now the crypto-native money seems to be flowing out of bitcoin earlier than expected, and this has started an early Alt-Season. As evidence of this we’re seeing many innovation assets significantly outperform bitcoin year to date. Not all perform the same, mind you. Adoption and usefulness are still key factors. Technologies such as Solana, for example, which are being heavily used, are great examples of innovation technologies that are outperforming bitcoin.

Point being, this second cycle, the Alt-Season cycle, has started and we don’t expect it to stop. Instead, rather than this indicating an early start and, therefore, an early end to Alt-Season we see this as an early start and a prolonged Alt-Season, which instead of running sequentially, could well move in parallel this time around. Two cycles…. hence…. bicycles!

Ultimately, this is very, very good for innovation investors as, while the masses are now warming up to bitcoin, the greater gains will be made in this innovation cycle.

Halving Rehash

So, the halving is upon us, and this may well be my final blog before this seminal event, so let me just touch on this briefly.

Assets that are sound money (money based on commodity, not credit) such as gold and bitcoin get value primarily from two things. The first is scarcity. In bitcoin’s case, there is a fixed supply and only 21 million that will ever exist. Second is acceptance and, an extension of acceptance is demand. In bitcoin’s case, the ETFs have created institutional acceptance on the widest level and, in doing so, it’ has created a modern gold rush and accessibility for all. Accordingly, demand is greater than ever before.

In Economics 101 we learned that price action is a function of supply and demand. In the case of bitcoin, there are currently about 19.7M bitcoin of the total 21M in circulation right now, and every day 900 new bitcoin are moved from the reserve pool of bitcoin into circulation due to the work of the miners on the Bitcoin network.

The Halving is a seminal event where, at a certain point in time, the number of bitcoin moved into circulation – granted to the miners for their work – is literally cut in half. Our next halving is expected right around April 20, 2024.  After this event, the amount of new bitcoin moved into circulation will drop from 900/day to 450/day. So, simply put, the amount of new supply will be cut in half.

Back to Econ 101. We currently have roughly 12 times more demand for bitcoin on a daily basis than we have supply. When supply gets cut in half, that demand pressure will double. And we all know, when everyone wants something… and supply is limited… price goes up. So, the Halving is seen as a seminal event to drive bitcoin price and, as noted above, as bitcoin goes, the innovation markets go as well, and often higher.

There are many other factors of course, including macro climate, regulatory frameworks, etc. but, in general, we are at a unique point in history where we have the greatest demand ever simultaneously with supply about to be truncated.

In Closing

So, we have a bull market like no other, going up, up (down) and Away!  To bookend our Babe Ruth analogy, we’re in the second inning of a 9 inning game that will span through 2025. Inside of it, we have two cycles now running in parallel, which is unusual, an bodes very well for investors, particularly those that are keen on innovation investing. Ultimately, we can expect ups and downs but certainly we are in for a run unlike any other, as there will never be a time in history again which is immediately after ETF approval, before supply constraint and, importantly, where we have innovation assets still in the early phases of adoption. For those that see this, I argue it’s a great opportunity.

So much more to say but I’ll hold it here and say that’s it for now. We’ll see you next month and, until then be well, stay safe, and I’ll keep Decrypting Crypto for you!

About the author James Diorio

James is a Principal and Chief Executive Officer of Tradecraft Capital.