Arbusers

''Be careful what you wish for'' is an idiom used to tell people to think before they say that they want something and to suggest that they may not actually want it. For years the crypto community is wishing (or maybe praying) for the Bitcoin ETF.

It is official. Now you have it. The Bitcoin ETF is here. Indeed it comes with a significant boost in the price of Bitcoin at least for now. But what does it mean for the long term?

Do you remember the fluid mechanics from High School and especially the law of Communicating Vessels? Just in case you forgot it I am presenting the following picture:


If a hole is opened in the bigger tank, both tanks will lose water. Imagine the Bitcoin ETF being the tube connecting the 2 tanks. People that invest it ETFs are also investing in other markets. The S&P 500 has a market capitalisation of 42 trillions USD. The total market capitalisation of domestic companies listed on stock exchanges worldwide is recorded at around 140 trillions USD. If we add the commodities, then the figure goes much higher and if we add real estate then we are talking about figures that no one ever calculated, probably one quadrillion USD. We can define a quadrillion as 1 with 15 zeros after it. It can be written as 1,000,000,000,000,000.

Now the total crypto market capitalisation is 1.85 trillion USD and the total BTC market capitalisation is 1 trillion. Don’t take these figures to the bank. They fluctuate every day.

Now let’s go back to the picture above. Imagine the left tank being Bitcoin with 1 trillion, and the right tank being all other assets with 1 quadrillion. In the middle, we have the Bitcoin ETF as the tube connecting the 2 tanks. Unfortunately the size difference between the 2 tanks is not possible to be pictured in a way that could be identified by a human's eye. The picture above is not presenting the real size difference between the 2 tanks.

Now, what do you think will happen with Bitcoin, when global economy gets a flu? What will the big boys do when they lose billions or trillions from all other investments? Will they keep their Bitcoin intact or will they sell it like any other asset they hold?

Now you know what is the role of the Bitcoin ETF. Now you know why I arguel this is the last Bitcoin cycle with noticeable returns.

Don’t be the brainless amoeba.

Your analogy employing communicating vessels to elucidate these dynamics is incredible. I mean, it is reasonable to consider that the initiation of buying pressure with the introduction of the etc ETF will also ignite selling pressure when the market dynamics shift but your note is another level.

Both in your current discourse and prior posts, it's suggested that the present cycle marks the culmination of observable returns.

I Imagine the market as the Pythagorean cup, and investors (institutions & individuals) filling it with their capital based on emotions. As they become excessively optimistic or greedy, pouring more and more into the market, there comes a point where a mechanism is triggered. This mechanism is the burst of "all assets" bubble.

The mechanism serves as a reminder not to all that excessive greed has inevitable consequences.

Considering the inherent cyclical nature of markets and that the cup of all assets gets full and empty perpetually is there be a future juncture where engaging in BTC becomes an asymmetrical bet for considerable profitability once more?