SELL-Fulfilling Prophecies & The Demand Wave
November is generally a very exciting and bullish month for bitcoin & crypto especially at this point in the traditional cycle. This time however, November did an about-face and instead of running for the mountain top it ducked for cover, turning November into “NO-vember.” BTC started at 110K but instead of climbing the mountain it fell to a valley and finished at $90K, with downward spikes even lower than that during the month. Was it the shutdown? (I think that played a big part.) Was there selling? (Absolutely). Is the bull run over? (I don’t think so.) But honestly, it doesn’t matter. I’m going to say what I always say and zoom out. Take a longer view. I’ll come back to that in a bit but now let’s begin by looking at what may have driven this most unusual month.
SELL-Fulfilling Prophecy
First let’s deal with the fact that in November the fear and greed index hit a rarely seen low of 10. That’s just about as low as it gets outside of a complete market meltdown such as during COVID. A lot of the traditional “OG” bitcoiners are calling this the end of the bull run and are expecting a bear… basically informed by the calendar. This logic points to a general thesis that roughly 18 months after the most recent halving, (when bitcoin supply replenishment gets reduced by 50%), cycles peak and, as such, it’s “time to sell”. Based on an April 2024 halving event we hit that 18-month mark in November 2025, so by this logic the clock said sell. Now, let’s explore this a bit. Guess what happens when a bunch of people sell? You get a self-fulfilling prophecy (or dare I say a “SELL-fulfilling” prophecy!) Selling impels price declines which impels selling which, (this month), also caused more forced liquidations, which of course impels even more selling, huge fear and… you get the point.
I personally think we’re in a pause largely informed by this calendar-based thinking. It’s true that the past two cycles have peaked around 18 months after the halving. It’s also true that the cycle before that, in 2012, the bull peaked 12 months after the halving. So then, the 2016 and 2020 cycles were each 50% longer than 2012. Add in institutional adoption, the regulatory landscape changing, and that markets that don’t operate on a fixed clock, who’s to say that the 2024 cycle won’t be 50% longer than 2020, just as 2016 was 50% longer than 2012? That would put our peak not at 18 months, but at 27 months. Now, before I go any further let me say that, in my opinion, making investment decisions based on a calendar alone is just silly. Likewise, projecting future cycle endpoints soley based on past timelines as I have done here and extrapolating is also silly. And that’s my point. Nothing ever hits a chart right on time just because of a calendar. It’s a guideline, sure, but we need to look at the data. Can I guarantee things will still go up and we have more bull legs in front of us? Of course not. But by that note I don’t think that we should predict that we’re going down just because of a count-of-days. Let’s look at just one of the underlying metrics. This cycle looks to be going a little long – into Q2 or Q3 2026, but the data supports it. It looks like here in the US that rate cuts are coming. Quantitative tightening has ended, and it seems that via buying bonds or via other measures, QE in some form or other is upon us in the US. Now consider that bitcoin is acknowledged as the asset most closely tied to global liquidity and in general, as bitcoin goes, so goes the crypto markets. Given we have loosening… logic dictates we’re still in for some upward movement. And that’s just one indicator. I can go on and on about other metrics but this is intended to be a color piece not a technical analysis piece (there’s plenty on this topic on the web for those that are interested). I want to stay higher level and simply remind everyone that, as noted in my last Crypto: Decrypted, every bull run has pullbacks. Some as large as 50%.
The point? None of this matters. This is all noise. Zoom out. This is a game of patience and perseverance. While everyone is looking at the daily price, I encourage you to look at the dynamics of who’s buying and what that may mean for us in a few years. In my opinion that’s where the real gains will be realized.
Demand, Adoption & Alts
Meanwhile, while prices were plunging, several endowments and public pensions stepped up to the plate. Specifically, Harvard tripled its stake in BlackRock iShares and is now holding $443M in Bitcoin represented assets. Emory College added new positions and now holds $52M. They join Brown, who previously disclosed roughly $5M in exposure. These endowments are clearly looking at the long game. What happens when other endowments jump on board? Demand Wave. Similarly, when we look at public pensions, the State of Wisconsin Investment Board and State of Michigan Retirement System are both in the game as well… what happens when other state pensions jump on board? Demand Wave.
From another perspective, a lot of people are talking about this space but still, not many are actually invested. It’s hard to quantify, however as of 2024 one of the more frequently cited estimates puts global cryptocurrency ownership at about 6.8% of the world population, roughly 562 million people. Now look, this is an estimate and no one knows for sure. But it’s not a big number. No matter how you slice it, we’re still in the early phases of adoption. What happens if that number doubles from 6.8% to 13.6%? Demand Wave.
How about if we look at it from a worldwide institutional perspective. Global investable assets according to MSCI were $213T as of the end of 2023 with a growth rate that year of 11%. Now, that’s a couple years old so let’s get a more current number. If we are conservative and consider a growth rate for 2024 and 2025 of half of 2023’s 11%, that would put us at 5.5% per year and bring investable assets somewhere around $237T. Bitcoin’s current market cap as of the end of November is about $1.7T, and the entire cryptoverse is roughly $3T. This means that Bitcoin represents 0.7% in investible assets, while crypto on the whole is 1.3%. When we consider that Gold is approximately 12% of total asset market cap and equities are 53%, it certainly seems there is a LOT of room for crypto to grow. What happens when that adoption that doubles or triples? Demand Wave.
Now, we noted earlier that institutions are still early but looking at this space, and they will need vehicles to support their allocation. As it turns out the big boys are setting the table with plenty of new product to satiate the inevitable appetite. As a case in point, while the shutdown was in effect, a number of ALT (non-bitcoin) spot ETFs suddenly appeared. Specifically, 5 new Solana spot ETFS were approved. Franklin Templeton, VanEck, 21Shares, Bitwise and giant Fidelity joined Rex Osprey and Greyscale, and combined this group is managing total AUM of roughly $1B. Not to be outdone 3 new XRP spot ETFs launched by Franklin Templeton, Greyscale and Canary, joining REX-Osprey’s launch in September 2025, bringing total Spot XRP AUM to approximately $470M. Let’s add to that three new spot DOGE ETFs, one Litecoin ETF, and a Hadera Hasghraph ETF. So, now, for spot crypto ETFs it’s like the days of Christmas. Sing it with me... 11 BTC, 9 ETH, 7 SOL, 4 XRP, 3 DOGE, 1 HBAR and 1 LTC in a pear tree! (I couldn’t resist.) And look, more are expected in these categories and in others. All of these are young. All of these are early. But it points to the institutional appetite. Demand Wave.
And certainly this new product is going to drive more allocation. I’ve discussed this phenomenon of Acceptance v. Adoption before, and it does look like it is shaping up exactly as planned. Is crypto now in a 4-year cycle? a 5-year cycle? From my view it just doesn’t matter, because the Demand Wave is coming. So, if ever you wanted a seat at the table, consider the time is now. Just ignore all of the noise, set your timer for 2030, and let the Demand Wave simply do what it does.
Texas Flexes
One of the things we’re watching closely as well is government adoption – once the USA buys its first BTC and adds it to the balance sheet I think it’s fait accompli that every major nation will need to do it. In the meantime the states are leading the way. Of the 20 states with some sort of legislation either in process or considered, three have passed legislation that allows them to purchase crypto assets directly, these being New Hampshire, Arizona and Texas. Of those three, Texas stands out as the very first state to pull the trigger and recently allocated $5M via a bitcoin ETF. I’m going to say that again; they consciously allocated to this asset. Would I rather have seen them purchase BTC outright and hold the commodity? Of course. Does it matter that they bought through the ETF? Nope. It’s still an allocation. This. Is. Happening! (Side note- I should probably have just put this in the prior section but, since everything is bigger in Texas, it of course deserved to be in a section of its own.)
BlockchAIn - OMG OCC
And finally and quietly, while everyone else was watching price action, the Office of the Controller of the Currency (OCC) came out and just casually noted that banks can now hold crypto on their balance sheets. This isn’t just so they can hold crypto for their customers, which the OCC provided guidance earlier this year. This is so they can hold it for their own use – specifically, to allow them to explore how to integrate and use blockchains such as Ethereum as a part of their business. This is a big step people, for banks to have a green light to engage and use blockchain technology, especially when one considers that just a few years ago the FDIC discouraged banks from engaging in public, permissionless blockchain networks. This is quiet progress.
What will this look like? Well, from my vantage point nothing short of the world of traditional finance taking the next step to integrate with decentralized finance, not only making their current general-banking-activities more efficient, but opening the door to new types of banking all together. In addition, it allows them to migrate out of antiquated ways of moving money and in my opinion into a much more elegant approach. Now, I probably need to acknowledge that the blockchain traditionalists aren’t going to love this, because one of the arguments of blockchain purists is that the whole point of this technology was to do away with banks. I don’t see it that way. I see this as the necessary bridge for the evolution of the entire financial industry. We are still going to need banks. But I think this is going to have us have better banks. Banks that are more competitive, have better fee structures, heightened transparency and, ultimately, a better customer experience.
And, of course, in the thematic of this entire missive, I believe this is just one more step towards that adoption curve…. the Demand Wave. Remember that collectively we had a ChatGPT moment in late 2023 when, all of a sudden, AI was available to everyone. It then quickly became integrated into our lives as a part of our daily toolbox. I don’t think it will be too long before we have a similar blockchain moment where it will move from being something that is looked at as a speculative asset to something that is a technology that is also a foundational piece of our everyday lives.
In Closing
I’m still bullish. We’re early in the adoption phase, new products keep coming out, new institutions jumping in, and banks are getting the green light. Simply put, the Demand Wave is coming. This is your cue to get out your surfboard and get ready to ride it, because over the next few years I believe it will be spectacular.
That’s all for now. Until next time be well, stay safe, and I’ll keep Decrypting Crypto for you!