OpEd: A Warning For FOMO Followers

Here we are – banging the liquidity drum again!

With Bitcoin around an all time high – and DOGE raging, words of caution may not be welcome right now in the crypto markets. We don’t care!

Here is the cold water…

We all love a crypto rally – but this one looks suspicious. It’s pretty clear that Trump’s election was the trigger for this pump – and that is cause for concern.

McTrumper isn’t the US President yet. That happens next year. We all know how fast cryptos can move – both up and down. The BTC pump from the $60k handle to almost 90k took a few trading days.

Smaller tokens – looking your way DOGE – are up over 300% in the same few days.

On a long-term investment horizon BTC at $85k is likely a good buy.

In the short term – this rally could be a head-fake that causes a lot of pain.

The Positive Take

As long as the US political system sees a peaceful transition of power, crypto prices will move up over the next few years. The “Biden” administration was harsh on cryptos – and that appears to be over.

President elect Trump is all about the USA – and punishment for any nation he sees as an economic enemy. That means a pro-USD stance, which may help cryptos grow as a means of global trade settlement.

If Trump sees the BRICS as a larger threat than BTC – we could see major issues for anyone trading outside of the USD system. The global crypto system is already up and running, so anyone could use it for cross-border settlement.

In his last Presidency, Trump went hard on China – and this is likely to happen again. Chinese and Russian companies already use USDT for trade settlement, and that may grow if Trump looks for ways to punish the Middle Kingdom.

While the average Chinese citizen can’t hold cryptos, the state-owned enterprises are another matter. It all looks good for non-state assets – like cryptos and metals.

And then there is DOGE. With a mind-bending rally since Trump’s election win, this meme token could be the biggest story of 2025.

Heavy Speculation

Is D.O.G.E. the biggest punk ever?

Not talking about Dogecoin – we mean the Department of Governmental Efficiency (D.O.G.E.).

Here is the thing about memetokens – there is zero fundamental value. DOGE isn’t innovative – but it looks like it will be a meme-frenzy machine going forward. D.O.G.E. relies totally on Trump, Musk et al. to have value – but it D.O.G.E. becomes a reality – DOGE at $100 isn’t a crazy speculation.

Trump and Musk have been attacked from every side for years. There is likely some resentment hiding in the wings of the new power structure.

The McTrumper got nailed for paying an escort or something to keep quiet. Or maybe it was an accounting thing. Regardless, ff everyone in Washington D.C. was held to the same standard – a new legal system would need to be set up to try all the cases.

For what it’s worth – the judge in the Trump hush money case seems to be moving in a new direction after the election. We wonder what else will change if Trump actually takes office next year.

Tim Dillon has some relevant views on what could happen next:

Turning yourself in might not be such a bad idea if you spent the last 8 years antagonizing Trump & co. – otherwise you might be standing tall in front of D.O.G.E.!

Sorry – Liquidity Calling Again

People are enthralled with political drama – but it doesn’t drive the base level of the financial markets – liquidity does. And now more than ever before – BTC is a global financial asset.

Trump’s election has done nothing to address structural liquidity issues in the global financial markets. In fact, the USD rally will act as a brake on lending, as USD-denominated debt rises in cost – both to issue, and to service. With liquidity flagging, a sustained crypto rally looks unlikely.

Q4 tends to be quiet as the Western world moves to the end of the year. A lack of major drivers could help crypto maintain current levels, but if any liquidity shocks emerge, major sell-offs are likely.

Central banks are still cutting rates, despite high asset prices. Stocks and cryptos are high by any historical measure, which makes market bubbles likely in the coming years. Crypto look like a go-to asset, which makes much higher prices likely in 2025 and beyond.

Darker Currents

Former US Army lieutenant general Michael Flynn has warned publicly about the President-elect’s safety. It’s easy to see why. The 2024 Trump campaign was marred by at least 2 assassination attempts, and they may not stop.

If Trump were killed – the chaos would be incredible. Civil war is possible in the USA – which may or may not be part of a shadowy group’s plans to consolidate power. Of course, we hope there is a smooth transition of power in the USA – but credible risks exist.

Assuming he is alive, Trump is also set to inherit an economy that is clearly not as strong as the stats suggest. Whoever was in charge for the last 4 years has been cooking the books, and the economic reality in the USA looks like a multi-year depression that keeps grinding on.

Banks are reporting much tighter lending conditions, which means less fresh debt hitting the economy. Combined with a much higher USD, a real economic recovery is unlikely, even with lower rates. There may be bright spots as some asset prices rise – although volatility remains a risk.

BTC @ $1,000,000 USD

We aren’t the first one to call for BTC at or above $1 million USD – but we will say that given the macro outlook – it is happening at some point in the next 4 years.

Hell, it could happen tomorrow for all we know.

Political theater aside, large risks remain in the markets – and we don’t think they are being priced in. The massive crypto rally does have a fundamental base – Trump and better crypto regulations – but the liquidity situation isn’t being given much weight in the “crypto up everyday” trade.

If you are patient, and can handle seeing your investment cut down by 50% in a panic sell-off – this might be a good time to buy a top token like BTC, ETH, XRP or SOL (to name a few). Be careful with the hype – it never lasts.