| | | | | By Ben Lilly, Senior Crypto Analyst, Brownstone Research | | Managing Editor's Note: Crypto's had a rough go of it lately… | | That's why, today, we're turning to Brownstone's resident crypto analyst, Ben Lilly. He explains why, though it may not feel like it right now, we are on the cusp of an incredible crypto run. | | Of course, as with any monster run that comes in the wake of record-low sentiment and high fear… hindsight is always 20/20. And as Ben explains today, that's why it's important to keep calm and stay the course or risk missing out on potentially the strongest rally in crypto history. | | |
By the end of the year, investors will look back on this moment and claim it was as obvious as it gets. | | But it doesn't feel that way right now. | | Current conditions are anything but easy. | | We have media outlets like CNBC, Bloomberg, and the Wall Street Journal running stories about the impending recession. | | | | JPMorgan Chase is raising their forecast of the risk of a recession this year to 40% – up from their prior forecast of 30%. | | And the fear and greed index over at CNN is running at levels not seen since September 2020. | | But here's the reality… | | The last time we saw market sentiment at this level or worse, investors realized some of the biggest gains in the months that followed. | | Below is a chart showing the American Association of Individual Investors Sentiment Survey. The survey is given to individual investors and asks their thoughts on where the market is heading in the next six months. They've been conducting it since 1987. | | The survey is currently at around 60%, meaning six out of every ten investors are bearish on the market. | | And there have been only two other periods when sentiment was worse than what we see right now. | | | | Those two periods were September 2022 and March 2009. | | Less than a year after both those periods, the S&P 500 index went up as much as 67% and 28%. And two years after the September 2022 date, the index was up 60%. | | It's a testament to Baron Rothschild's cliché quote, "The time to buy is when there's blood in the streets." It's a metaphor that suggests the best time to buy is when the market is in a state of panic and fear. | | And that's what we have today… Extreme fear. | | But what most won't tell you is that during the most recent stretch of extreme fear… There was another industry that outperformed traditional markets. In fact, its bellwether asset was up nearly 300% over the same period the S&P went up 60%. | | But this time is different… | | There's a monster catalyst taking place right now for this nontraditional asset. One that you won't see traditional media outlets covering. | | To ignore it would mean missing out on what will be this year's biggest gains. | | | | | | Every 100 years or so, gold returns front-and-center to steady the world's monetary system. We are closer to the moment than we've been since 1918. Now, Team Trump is overturning the current system in favor of one that – if successful – will restore the US to financial sanity… and send gold up to absurd new highs. That's why you need to know about the Top Four miners with 100X potential. Find Out How a Small Stake In This “Golden Anomaly” Could Transform Your Financial Future. | | | | It's GENIUS | | The media has been relatively quiet about the most recent session in Congress. | | It was a markup session. This is where committees in Congress hash out specifics on certain bills, amend them, and decide what moves forward. | | It's when work gets done. | | What makes this session so important is that it's the first one of the new 119thCongress. This means we get to find out the true priorities for the next year and the new administration. | | For subscribers of Permissionless Investor and Neural Net Profits, this shouldn't come as a surprise as Jeff and I have been getting updates daily and attending invite-only calls with industry experts and Congressmen to stay on top of the latest developments…we're even heading to D.C. next week for more meetings and research. | | One of the most important recent developments is the bill, "Guiding and Establishing National Innovation for U.S. Stablecoins of 2025" or "GENIUS Act of 2025" is one of the top priorities of the year. | | It's a bill that lays out a federal regulatory framework for payment with stablecoins. It lays out the definition of a stablecoin, discussing a licensing framework, and some protections such as reserve requirements, disclosures, and oversights. | This moment is monumental for the digital asset industry. For years the industry has been suppressed by regulators and lawmakers. We've written about this in greater detail in The Bleeding Edge – Washington D.C. Puked. | | It's why the industry has been eager for regulatory clarity so it can deliver compliant products and services to customers without fear. | | Even Wall Street is champing at the bit. | | BlackRock CEO Larry Fink was on camera pleading to the SEC to approve tokenization while he attended the World Economic Forum. JPMorgan Chase CEO Jamie Dimon also was vocal at the same meeting about tokenization, just as his companies prepare to launch their own blockchain-based foreign exchange solutions this year. | | And then there was Bank of America CEO Brian Moynihan who, during an interview with David Rubenstein at the Economic Club of Washington, D.C., stated that once stablecoin legislation gets approved, his company will go into that business. | | And here we are… | | Bipartisan legislation is moving to the Senate floor for a vote. And on the House side, it's fully expected to move through with a Republican majority that is fiercely pro-crypto. | | A Regulatory 180o | | It can't be stated more clearly that this is a monumental shift. | | Overnight, this bill will act as a massive catalyst to the $220 billion stablecoin market that represents more than 8% of the entire market cap of cryptocurrencies. | | It's why I fully expect stablecoins to top $1 trillion in market size by the end of the year. | | When it does, the applications and blockchains that host these stablecoins are poised to realize a major influx of valuation, funding, and users. | | But that's not all… | | The GENIUS Act is just the beginning. | | Congress is expected to break ground several more times in the coming weeks to months. | | For proof, we can look no further than the financial regulators themselves. | | The Securities and Exchange Commission (SEC) has been busy over the last few weeks dropping court cases against some of the most influential entities in the space. | | This includes the exchange Coinbase, wallet provider MetaMask, developer group Consensys, decentralized exchange creator Uniswap Labs, digital collection marketplace OpenSea, and many others. | | Their dismissal is signaling that regulators are clearing the table for what is set to be the biggest piece of legislation of the year for digital assets, which is an all-encompassing digital asset framework bill. | | It'll establish a clear framework for the industry on how digital assets can operate without fear of regulatory blowback. | | And it's not just the SEC court case dismissals… | | Acting SEC Chair Mark Uyeda is erasing certain crypto-specific language from a prior Exchange Act Rule that defined an exchange in a way that severely limits certain cryptocurrency marketplaces. | | The removal ensures new frameworks won't hit any snags on pre-existing definitions. | | Even the Office of the Comptroller of the Currency is taking part in the action… | | It released fresh guidance last week directed at banks and federal savings associations. That guidance states these institutions can custody cryptocurrencies and stablecoins and even verify a blockchain network like Ethereum. | | | Hindsight Is Always 20/20 | | It's a 180 o from just last year when Senator Elizabeth Warren was looking to create an anti-crypto army. | | When we take a step back and make sense of all the actions taking place week after week since the new administration came in, it's clear how high up on the priority list the digital asset industry sits. | | There are concerted and joint efforts taking place across the aisle and across agencies to prepare for digital assets becoming a dominant force in finance. | | And yet… | | Sentiment in traditional markets – and especially cryptocurrencies – is at record lows. And it's hard to believe because when we step back and look at what's going on, it's clear that things have never looked better for the industry than they do right now. | | It's a monster catalyst brewing. | | And as soon as markets do what they historically do after sentiment gets as low as we see today, hindsight will tell us that all of these positive developments happening right now were an obvious sign for the bull run to come. | | That's why now is the time to break away from the investing majority that sees the next six months as bearish. | | Instead, we'll stay calm and stay smart by positioning ourselves ahead of what will be the strongest rally in crypto history. | | Your Pulse on Crypto, | | Ben Lilly | | P.S. If you want to get involved in what will be a historic time for the digital asset industry, be sure to join us at Permissionless Investor. We uncover the protocols and blockchains best positioned to rally from this monster catalyst. | | | | | | | | | We're about to witness a breathtaking increase in both the manufacturing and adoption of general-purpose robots. | | | | | | Robots on Mars, autonomous driving, the big business of class action lawsuits… it's AMA day at The Bleeding Edge. | | | | | | We're on an accelerated path toward an essential breakthrough in quantum computing… and the stakes are high. | | | | | | | | | | | | | | | To ensure our emails continue reaching your inbox, please add our email address to your address book. This editorial email containing advertisements was sent to southernstylecooking@gmail.com because you subscribed to this service. To stop receiving these emails, click here. Brownstone Research welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. 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