Bitcoin Price Analysis and Macro ft. Tone Vays - FED98
Bitcoin cycles and current market price with Tone Vays
This post is to provide the associated images and commentary for the audio podcast until the full write up is posted on Bitcoin Magazine.
Hosts: Ansel Lindner and Christian Keroles
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Fed Watch is the macro podcast for bitcoiners. Each episode we discuss current events in macro from across the globe, with an emphasis on central banks and currency matters.
In this episode of the Fed Watch podcast, I get to sit down with Tone Vays, a true bitcoiner and long time price and macro analyst in Bitcoin. Our discussion ranges from the current conditions, to Bitcoin cycles, to broader macro topics including the state of Europe, Euro, and US politics. You can follow Tone on Twitter, instagram and YouTube.
You can find the charts for this episode on BitcoinandMarkets.com/fed98. And watch the live stream on Bitcoin Magazine’s channel.
Current Bitcoin Market Conditions
In the first segment of the podcast, Tone talks about the psychological state of the Bitcoin market. Paraphrasing:
“I was around for the last two bear markets. 2013 was the classic bubble chart, you were mentally prepared for what’s to come. 2017, again, the ICOs, it was an unreasonable exponential rise, so you were mentally prepared. I wasn’t mentally prepared for this one. Because, when the top came in April 2021, we had an incredible amount of good news. Michael Saylor, Elon Musk, Jack Dorsey leaving Twitter to go all in on Bitcoin with Square (Block), El Salvador, then El Salvador buying bitcoin.
"That turned into a sell the news event. 50% correction, no big deal. Everyone was mentally fine with it. Then, this is where it’s all about your mental state. When we went back and broke that top, in November, that was THE breakout. Everyone thought we were going higher, I thought we were going higher. That fakeout in November was mentally brutal. We crashed back the $30,000 low, broke down to $20,000, and over the last 3-6 months people have been very very concerned.
“This prolonged move has made people tighten their belts. Mentally, they feel like they were cheated and don’t think bitcoin should be at these lows. Bitcoin was built for this world we are seeing right now with all the uncertainty. They are stealing bank accounts from not just individuals, like in Canada, but from sovereign countries. Bitcoin was built for this, but the price keeps going down. People are starting to throw in the towel. Everyone is saying lower, lower, lower. This is where I have to believe that the majority is always wrong.”
Both charts credit: Tone Vays
I asked Tone about bitcoin valuation models and 4-year cycles, whether they are all broken and if we need to find a new model.
He says he thinks models always fail. Stock-to-flow is theoretically correct in Tone’s mind, but it cannot be successfully used as a technical indicator. As for the 4-year halving cycle, Tone believes that it is partly due to hype and partly due to actual supply shocks.
That is my position here on Fed Watch as well. It has its own hype cycle, completely separate from the overall bitcoin hype. Kind of similar to how altcoins try to hype their hard fork upgrades, bitcoin accomplishes that naturally through the halving.
However, I think the hype is lessening with each cycle, along with the supply shock aspect. That is why I now believe we have a 2-year cycle of sorts. A smaller effect from the halving, but which still causes an echo a couple years later.
Tone insightfully points out that there is much less of a clear distinction between bull and bear markets. Price action in the years 2020 and 2021 do not lend themselves to a clear dividing line. Going forward therefore, it will become harder to delineate these cycles.
Europe Crisis and Global Macro
We started running up on our hard time limit before we got into the juicy stuff. So, hopefully we can have Tone back on in a few months to continue this discussion. But we did get Tone’s opinions on Europe and the Euro. Paraphrasing again:
“I will say that I have a very low opinion of Western Europe. It’s nice, you go there it’s safe, you can walk around the street, you feel fairly safe. It has remnants of collapsing capitalist society, as they hand over all power to the World Economic Forum. I believe that the WEF is too liberal socialists organization. They have too much control over politics. To quote Klaus Schwab, “we have penetrated the cabinets.” And they have.
"I think the path of the WEF is a very very dangerous path, and I short the future of Western countries that buy into its power. That’s why I’m very bearish on Europe. I think the common currency will break up.”
We talk about so much more, from bitcoin’s correlation to stocks and altcoins, to monetary policy. This is one of my favorite episodes we’ve ever done on Fed Watch, so it is definitely a must listen.
Check out Tone’s twitter and YouTube channel.
That does it for this week. Thanks to the watchers and listeners. If you enjoy this content please SUBSCRIBE, REVIEW on iTunes, and SHARE!