Crypto thoughts at the start of a bull market

It’s Saturday afternoon and I am sitting at the pool at the sailing club while Scott is sailing a regatta in his Laser. It has been an insane week in the crypto markets, so I am using this time to think about what’s been happening in crypto. Writing it down always helps, so I am doing that now and will then post these thoughts on my blog. These are just my thoughts on the market, where prices will go and when, and what other coins or projects I am looking at. As always, no investment advice. I you want to follow my ideas do your own research first.

Returns since my last public blog post

In a bull market it’s easy to make money, so my predictions in my last public post about crypto turned out to be pretty good. I put that blog post online on 4 December 2023 and less than 2 months later 6 out of the 7 tokens that I discussed are doing extremely well, the only one that went down is Rune.

BTC + 55%

ETH +55%

Doge +52% 

Solana +104%

INJ +150%

Rune -16%

Filecoin +88%

I have closed some of my alt coin positions now and switched these profits back into Bitcoin. Because BTC ‘only’ did 55% over the past 2 months I now have more Bitcoin than in early December plus I still have positions in some of these alts. As I said before, getting more Bitcoin is my final goal of playing with alts. I think there is still a huge alt coin summer coming, but we are not there yet. Over the next couple of months my focus will be on BTC, ETH and Solana and some other ideas (see below). I will also keep my DOGE (see my last post for the reasons why), but that’s a fairly small position. 

Bitcoin price predictions

The reason these tokens went up is simply because the first phase of a new bull market has started now that the Bitcoin ETFs have finally launched in the US. I am extremely bullish on Bitcoin -and therefore on many other quality tokens- over the next 12-18 months. The money that is flowing into the ETFs beats almost every prediction and there are not many coins left to sell, so prices have to go up. Bitcoin will hit an all-time high soon and may hit $100K before the summer already. The sky seems to be the limit right now and I expect a parabolic increase in crypto prices. It’s hard to say where Bitcoin will land over the next 12 months, but I expect it to triple from here, unless inflows in the ETF should stop or another Black Swan should appear (like Terra Luna and FTX in the last cycle).

Why does TradFi not understand crypto?

To me it’s so clear what’s happening, but it seems most traditional investors for some reason can’t see it. I have lost all interest in equity markets (except for crypto stocks), why would you spend time and money on stocks that go up 15-20% per year when it’s pretty much guaranteed that crypto could do that every few weeks for the next year or so? When I read analyst reports on stocks I feel these guys are simply wasting their time. I actually feel a bit sad for people working for investment funds or pension funds that are not even allowed to allocate to crypto. They are simply fooling themselves and their customers because they don’t see that Bitcoin will eventually suck in all monetary premiums from the stock market (and from real estate, but that’s a story for another day). Yes, Bitcoin is volatile but that is temporary and if you are a decent trader you can get out when the price is high and get back in at a lower price.

Worldcoin

Next to Bitcoin, Ethereum and Solana, one thing I am looking at right now is Worldcoin and that’s actually more by coincidence. I happened to see their stand at Token2049 Singapore in September last year and decided to do a face scan. Many people were actually mocking me online at me for doing that, but it turned out that this scan is now making me money. Because of the face scan I got some free WLD tokens and even though they were not worth much it caused me to spend quite some time after the conference on how Worldcoin works and what it can achieve. As you probably know Worldcoin was started by Sam Altman, the founder of OpenAI, and that’s why I think there may be more behind WLD than most seem to realize. Sam is one of the smartest people on this planet, he is one of the few stars of AI and he is an incredible businessman. Therefore the reason for setting up WLD for him is not to make money (although it may net him billions once again), but mostly to help the world to create a Proof of Humanity. 

Basically Proof of Humanity means that in a world dominated by AI this might be the only way to prove that you are a human being. Just that fact could eventually lead to a multi-trillion dollar company, we just don’t see it yet. When I got my free coins they were worth about $1.45 per coin. I got 25 of them, so in total about $36. After doing some basic research I bought a few thousand dollars more on another exchange, just to make it more interesting, but then I still managed to forgot about the token.

Then about 2 weeks ago my son Scott told me that WLD has free airdrops every week, and I then remembered I still had a WorldCoin wallet on my phone. So I opened it up and saw I had missed a lot of airdrops, but most had expired already. I managed to get an additional free 13 tokens right away, simply by opening the wallet, and this morning I received another 3 coins, so I am now the owner of 41 coins in the main wallet.

Surprisingly the price has gone up from $1.45 to about $8 (=700% in less than 6 months), so just these free tokens are worth a couple of hundred dollars already. I missed hundreds of dollars worth of free coins already, but from now on I will open my app once a week. Any human being can do a free face scan and get these tokens. Just the new tokens you get airdropped every week are worth about $25 already, not bad for many people in third world countries. The small amount of WLD I bought of course also went up 700% and I just bought a few more coins. I will certainly keep following WLD more closely over the next couple of months, especially once ChatGPT 5 will come out and/or when we get close to AGI this could be a token to watch. I don’t know if it will outperform Bitcoin, but it’s a bet that could pay off if we suddenly realise AI is taking over and we need to be able to have Proof of Humanity.

Coinbase

Another thing I am looking at is Coinbase stock. When $COIN went down a lot in January and I was reading the analyst’s reports, I realised these people seemed to have no idea about about Coinbase’s potential in a raging bull market. So I decided to put my money where my mouth is and I bought long-dated out-of-the-money call options Coinbase on February 8 (and tweeted about it, in case you think I am making this up after the fact). The share price was about $132 when I bought the options and today (just over 3 weeks later) the share price is at $205. A return of 55% is not bad, but because my calls are now deep in the money I made my money back several times that so far – and the options have still 16 months until expiry. Once the bull market really starts these calls will bring hundreds of percent of additional returns. It’s so obvious to me…

Because the market still does not see what I see in Coinbase, I am actually thinking of buying some additional calls, again out of the money and again with an expiration in Q2-Q3 next year (=at the end of the bull market). It’s much more expensive now, but it should still outperform Bitcoin in a bull markewt. Coinbase is almost a monopolist at the moment, they are by far the biggest regulated centralised exchange in the world. Sure, eventually decentralised exchanges will take over, but that will be years from now.

Next to that I think the market does not understand the real valuation of the investments in many start-ups that Coinbase has made over the years. As far as I know they invested in hundreds of start-ups and many of these have done very well over the past years (potentially 10-100X for many of them). Because of US accounting rules they are all still at cost in their books, but guess what? These rules have changed this year, so at the end of 2024 they could all of a sudden have billions (!) of dollars of additional profit on their balance sheet. In my opinion this is NOT reflected in the current share price yet because analysts don’t understand what’s on Coinbase’s books.

Not only that, but Coinbase could even become a leader in Web3 through Base, a L2 solution built on top of Ethereum. I would not be surprised if they would eventually issue a token for Base, which could again net the company billions of dollars. Next to that Coinbase makes custody fees on the BTC ETFs, because most of the ETFs store their coins with Coinbase. Because the ETFs are such a success it will make Coinbase even more profitable. Finally I think stablecoins will become much more important in this cycle and guess who is the second biggest player in stablecoin land? Indeed, that’s USDC that Coinbase is backing through Circle. Just in Q4 2023 Coinbase already made over USD 170 million on USDC and that will only increase this year.

Coinbase is certainly not the best company in crypto. Their service desk is terrible, they make it impossible to move to a different country, and they even went down this week when Bitcoin went up too fast (with a lame excuse). I also know several people with coins stuck in Coinbase for years, that can’t get them out because of ever increasing and very opaque KYC regulations. But for now it is the biggest global exchange and it has a strong senior management team, so for now I am rooting for them – and making a ton of money while doing that.

Stacks (STX)

One last thing I am super bullish about is Stacks ($STX). This token has done incredibly well over the past couple of months (but at that time I was not an investor yet) and I think it might keep doing well. Stacks is Layer 2 solution on Bitcoin, just like Lightning, Liquid and Rootstock, but unlike Lightning and Liquid it has its own token. Right now Web3 is mostly built on top of ETH and SOL, but now that Bitcoin Ordinals have taken off I believe a lot more will happen with smart contracts on top of Bitcoin. Imagine to get (re)staking on Bitcoin, like Eigenlayer is doing Ethereum – with Stacks that might be possible! I will spend significant time on this over the next days and will start building out my position if I think that STX is undervalued. 

Conclusion

Rereading this post it feels a bit like I am showing off my investment capabilities. But that is not the case at all: anybody who invests in crypto will make these returns right now, especially if they look further than just Bitcoin at this stage of the bull market. This will go on for many months to come in my opinion. As I said before, I don’t understand why people keep money in the stock market right now (or worse, in cash…), you are missing out on the opportunity of a lifetime.

2024 can be life changing if you are willing to spend some time on educating yourself and then take the jump into crypto. Even just buying the ETF could lead to an early retirement if you hold on to the shares for the next 5-6 years (through the next bear market, even without selling on buying back). Anyway, these are just my personal thoughts on a sunny Saturday afternoon and not meant as investment advice. The only advice is to spend time to understand Bitcoin and why it is still around despite governments and traditional media trying to stop it. I have been writing about Bitcoin for 11 years now on this blog, I hope you will trust me if I tell you that it is not going away anymore.