Compiled by: TechFlow
I believe Bitcoin is entering a generational phase of development the likes of which we have never seen before.
I've been trying to convince people in the cryptocurrency community. But they don't understand.
I finally found an example that they could understand.
Please read this article in its entirety. It may save your family retirement
If I am correct, Bitcoin is now in the final stages of a generational rotation.
Many, if not most, of the old big holders have exited the asset. They sold at what was considered the top (around $100,000) and were replaced by new holders.
This rotation is rare and difficult to achieve. But when it happens - and I believe it has - it will be followed by a previously unimaginable increase in multiples.
But you don't have to imagine what this will look like. Because it turns out, it has happened before.
The Enlightenment of Dogecoin
Today, Dogecoin is known as the king of Memecoin, the meme that everyone dreams of copying. But few people understand what exactly happened and how Dogecoin gained its legendary meme status, and how unimaginable the whole process is.
Dogecoin has been seen as a joke in crypto circles since its creation in 2013. Experienced Altcoin traders believe that the way to play Dogecoin is to accumulate for a few months during quiet periods, then sell them at 5-10x profit every few years when newcomers emerge, and then start accumulating again during the next quiet period. And so on.
They have gone through multiple cycles, buying and selling Dogecoin for less than a penny, making money from newbies.
But on April 2, 2019, something crazy happened.
Elon Musk, then celebrity CEO of Tesla and SpaceX, tweeted: "Dogecoin is probably my favorite cryptocurrency. It's very cool."
Under the influence of this news, Dogecoin rose 50%, from 0.24 cents to 0.36 cents (note that it is cents, not dollars).
A 1.5x increase in one day, pretty good, right?
Wrong. This is nothing. Dogecoin is about to rise another 200x from there, almost surpassing Ethereum.
But in July 2019, existing Dogecoin holders could not imagine such a future. Dogecoin went from $0.0025 to almost $1 in just a few years? It was ridiculous. It couldn't happen.
This is a huge event, and crypto natives thought they knew it was a huge event, but they severely underestimated it.
So after the 50% rise, they prayed to Satoshi Nakamoto, thanking him for letting Elon Musk start promoting Dogecoin, and then they started selling.
For a short time, their choice was right.
Old holders had been selling on every rally for most of the year, and they felt pretty good about themselves when Dogecoin kept failing breakouts.
But something was going on beneath the surface. After the COVID-19 outbreak, people learned that they could sit at home and try to short GME on Robinhood, and some of them noticed that Robinhood also offered cryptocurrency trading.
Back in 2020, Robinhood only listed 7 cryptocurrencies, BTC for the old-school, ETH for the tech geeks, and then some embarrassing coins like BCH and ETC. The only interesting and cool coin on Robinhood was DOGE.
The army of Robinhood meme traders saw this opportunity and launched a popular TikTok trend, the “Dogecoin Challenge.”
Users were encouraged to share screenshots of their Robinhood accounts showing the Dogecoins they had purchased. The trend exploded. Everyone was buying.
Just some TikTok users, no big deal...
But Crypto Twitter didn’t notice
Crypto natives barely pay attention to Robinhood or TikTok in 2020. Most old Dogecoin holders have absolutely no idea what’s going on. So every time the price goes up a little, they sell.
As far as they are concerned, Dogecoin is just a stupid joke that you sell when it goes up and buy when it goes down to make some extra money.
If you look at the charts you’ll believe this. For most of 2020 the price didn’t move much. Everyone was trained to believe “when Elon tweets we just go up 20%” because old holders are always there to sell and drive the price down.
They have no faith.
But new holders do have confidence
Beneath the surface, TikTok's young people have been buying in.
The crypto Twittersphere was largely kept in the dark. The charts led them to believe nothing was happening.
It wasn't until January 2021 that Dogecoin sellers finally ran out of tokens.
In just two weeks, the price of Dogecoin soared from $0.008 to $0.08, a 10-fold increase in two weeks, and its market value also soared from $1 billion to $10 billion.
People on the timeline went crazy. Group chats exploded. Old whales were calling each other in the middle of the night. Did you see that? ? ? ?
“Did you see this?!?!” The First Dogecoin Cognitive Meltdown
It’s hard to put into words what a huge cognitive shock this was. Most crypto natives were completely devastated because almost all of them had owned Dogecoin at some point in the past 7 years, and almost all of them had sold it. They barely paid attention to the TikTok trend and had no idea that this wave had been brewing for months.
But their biggest mistake was yet to come
Eventually realizing that the entire retail world was in love with Dogecoin, some savvy crypto traders started buying back in. There were many posts on the timeline boasting about how they had quickly doubled their money with Dogecoin. They were all very proud of themselves.
But none of them expected that this whole massive move was just a warm-up.
Their minds are still stuck on the old Dogecoin price. Dogecoin is a coin worth less than a penny. Everyone knows this. If it briefly exceeds a penny, it's a bubble, and we use it to accumulate more stablecoins and then leave.
But the new holder knows nothing about the old price
The young people on TikTok and Robinhood have no idea of the years of pain that older Dogecoin holders have endured. In fact, when they zoom out on the Robinhood chart, they can’t even see the historical price action. To them, it’s a blank slate, and “Dogecoin to a dollar” makes perfect sense.
So, as old holders rotated out, new holders had no idea of the old low prices, and after convincing CT between February and April that the rally was over, Dogecoin exploded 10x to a final peak of around $0.70.
What happens when the seller runs out of tokens?
That’s 200x higher than the peak of the first Elon rally in 2019. In 2 years. TikTok users cashed out big and CT missed the entire rally. The best CT traders probably locked in a 3x gain in the middle (and made sure to brag about it on the timeline for a few months)
The same thing is happening to Bitcoin today
Granted, Bitcoin is much bigger today than Dogecoin was back then. But there are also more players. Instead of Robinhood retail traders and TikTok users, we have institutions, ETFs, and Bitcoin money managers like MSTR. Instead of Elon promoting Dogecoin (who, by the way, was not as famous in 2019 as he is now), we have the president of the free world promoting Bitcoin. Maybe we even have — or soon will have — countries buying Bitcoin.
Institutions have been buying Bitcoin like crazy from old holders: crypto natives who aren’t paying attention. Crypto natives have no idea how traditional capital markets work. In fact, they laugh at them. They don’t want to know . So they miss out completely and keep selling at around $100,000 because that number is ridiculously high to them.
But new buyers don’t even see that number. $IBIT , the BlackRock Bitcoin ETF, is priced at around $70. Its chart starts at the ETF listing date (January 2024) when the price was $30. It’s only up $40! That’s nothing, so why not $700?
This is the chart that IBIT holders see
And Bitcoin treasury firms like Saylor’s MSTR don’t even look at the unit price of the underlying asset . They measure their purchases in dollar value. “We deployed $500 million last week.” They are completely insensitive to the Bitcoin price. They just throw as many dollars as they can at it. (MSTR, by the way, will likely continue to do this at an increasing pace. If you’re sitting there waiting for Saylor to blow up, it means you don’t understand what’s going on. Do your research. It’s not going to happen anytime soon.)
CT and crypto natives thought that was the whole move from $50k to $100k after the ETF approval and Trump's win. I mean, it stopped going up!
But the fact is, it just takes time to rotate assets out of the hands of old holders. The real rally hasn’t even started yet.
Look around
Most of the old Bitcoin maximalists are nowhere to be found. Where are they? Did they disappear?
Most of them sold up. They bought houses and boats and moved on.
Where are the crypto investors? They swapped to ETH and wrote about rollovers and staking returns.
What about the young speculators? They never had a bitcoin, they are all trading worthless air memecoin. Dreaming of catching the next dogecoin, not realizing that the next dogecoin is actually a bitcoin.
No one is left. Wall Street is buying up everyone’s Bitcoin. And they’re just getting started.
What happens next?
As you read this, you don’t want to believe it. You most likely have a severely inadequate understanding of Bitcoin. You know that I have predicted Bitcoin correctly every step of the way, every day, for months, and that’s why you are reading this reluctantly, but you still don’t want to believe it.
So if we think back to the Dogecoin story, we are now where we were after Elon’s first tweet, after the TikTok “Dogecoin Challenge”, but before the first 10x rally in January 2021.
In other words, Bitcoin was there after the ETF, after Saylor’s acceleration, after Trump’s inauguration, etc. But it was also there before anyone believed “this time is really different”, before anyone realized “sellers have sold out of BTC”.
Bitcoin is much bigger so we may not see a 10x increase right away, but as I said before I am pretty confident we will see $400k by the end of the year. That target is probably too conservative.
You still think it's ridiculous. But the old holders are out. There's no reason we can't have a rapid up multiple again.
And, this is just the first wave. I think just like DOGE, the first cognitive collapse will be followed by a bigger, faster, and more violent cognitive collapse. After the first 400k target, there will be another cognitive collapse of 10 times or more. This will happen when the whole world starts to believe (remember when every young person in the world talked about Dogecoin for a month?). But I don’t want to talk too much about it now. That’s the second cognitive collapse. That will come later.
We are entering our first cognitive collapse.
What does this mean for you?
First, you can actually retire on 1 Bitcoin. If you have the possibility to get 1 Bitcoin, do it now. Put it aside and forget about it. I'm not sure you will ever have that opportunity again.
Second, after you buy your first Bitcoin, keep buying Bitcoin. Keep adding. That's what Wall Street is doing. Do you really think you're smarter than Wall Street? They've outsmarted you in the last 2 years.
Third, now is not the time to wait for the price to drop. Who will sell? The old holders are out. They can't sell the coins to you, they've already sold them.
Oh, and there's a fourth one...
The fate of Altcoin
Your Altcoin are screwed. There will be a few outperformers here and there, and if you really pay attention, maybe you’ll grab them. Quick in, quick out, thanks for the scam . But most Altcoin won’t be able to keep up with the massive amounts of money flowing into Bitcoin.
It’s not going to happen immediately. But if Bitcoin goes up 50x to 100x in a relatively short period of time, then no currency, not even one backed by revenue, can sustainably catch up unless revenue also grows 50x, which I think is possible for early-stage businesses. So you can still bet on early-stage businesses if you really want to.
It’s interesting that some of the big memecoins dream of copying Dogecoin’s success without understanding what really made it successful. They think if they copy a few elements, like getting listed on Robinhood (but this time with 500 other tokens) or having Elon mention it (but that’s not cool anymore, he does it all the time), or making some TikTok videos (nowhere near the corona zeitgeist) they’ll be successful. But the pieces just don’t match up. It’s clear that Bitcoin is a better story.
The biggest loser in this cycle may be Ethereum. MSTR market cap may exceed Ethereum market cap. Ethereum will truly fulfill the prophecy: "There is no second best" because it will leave the second place and be replaced by MSTR. Ethereum holders are also starting to build treasury companies, which is cute, but they can't catch up in this cycle.
You should be able to see the problem easily, the biggest Ethereum bulls are aiming for a pitiful $4000 target on the timeline, while embarrassing characters like sassal and eric.eth are still posting garbage on a daily basis. The problem is that the old holders are still there. So yes, ETH will perform well here and there, but only in short bursts, and overall ETH/BTC will continue to make lower highs as the old holders continue to give up on every small rise.
If Lubin and Tom Lee and friends continue to buy them for years, then maybe the next cycle will finally see a real rally in Ethereum. I don't think this cycle will happen.
Wall Street is buying all the Bitcoin
Buy some Bitcoin before all of them are gone.
Thank you for your attention to this matter!
Risk Warning
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