Transcription
The checkmate party 3 and you will understand why. We have seen many principles regarding QT, regarding QE, the rate cut which is already priced in, and what is coming is hyper bullish in the medium term for the crypto market. But on the other hand, in the short term, we are seeing a small bearish narrative for all the rises we have observed. One fact that is bullish is that if we have a rate cut in an environment that is not yet too inflationary and in a macro that does not lead us to believe that we are at a market top, especially with a rate cut happening in a hard landing context, then it is bullish in the medium term. However, in the very short term, it remains a bit negative. Why? Because rate cuts, and even more so in the current environment, imply a certain uncertainty regarding what can happen in risk-on markets, stock markets, and crypto markets as well. Of course, you see the stock market, S&P 500, Nasdaq, making new highs, while the crypto market is floundering in the mud because the crypto market unfortunately has a negative point that it will carry for a very long time: it is the riskiest and most speculative asset. So, uncertainty implies that large portfolios, the most experienced and diversified investors on the market, will first shed what is riskiest in their portfolios, and what is riskiest are cryptocurrencies, with altcoins at the forefront. What needs to be understood and integrated is that altcoins, compared to Bitcoin, are child's play in terms of fundamentals. What I mean by that is that as long as the Bitcoin narrative continues, meaning we don't know who is behind it, Bitcoin is self-managed thanks to a computer program and thanks to the blockchain, there is a limited supply, there is scarcity, there is adoption by states, private companies, public companies, etc., etc. Bitcoin will always be seen as a tier-one asset. On the other hand, altcoins, it's not the same. It's more speculative, but behind it there is a human hand, there is a company, a team, a project, a roadmap, a vesting schedule, etc., etc. And if not all the boxes are ticked, there will always be a reason for investors to say they are not getting involved. Human risk is a component that must be taken into consideration, and we saw this with the crypto KDA which, if you've looked a bit at what's happening online, decided less than a week ago to stop its activity. The team clearly said, "We are stopping the business." So, you need to understand one thing: as an investor, this is scary. It's scary. We are in an unregulated market, which is very thinly capitalized. We are not investing in Meta, Amazon, Google, which have years of experience, a proven team, proven financial figures. It's not the same thing at all. And this is reflected in the Advance Decline Index right here, which shows you the performance of the top 10, top 25, top 100 cryptos over time. And you can see that over time, the top 100 has only underperformed. What this means is that if you are in altcoins from the 26th to the 100th position, there is a high chance that you will see your altcoins underperform as time goes by. We are not talking about small rebounds here, or if you happened to be positioned just here, you would see your portfolio appreciate. We are really talking about a dynamic in which you bought your altcoins around 2021. You held them until now, and you realize that the price they are at now is almost the same price for most of them as in 2021. This means that in 4 years, you would have made zero profit. The closer we get to highly capitalized altcoins, especially the top 25, the more you see that the reality is different. If you have been in a top 25 crypto since 2020-2021, your cryptos will have appreciated. They will have appreciated in 4 years, certainly, but at the cost of great psychological suffering, unbearable waiting, etc., etc. And the closer we get to the top 10, the more, naturally, we find this aspect of crypto performing. The lessons to be learned are as follows. 1. Low-cap cryptos are more volatile, can offer better profit prospects, but not in the long term. It is better to focus on highly capitalized altcoins in the top 10 or top 25. And 2, regardless of the type of altcoin you have, and you know this, they perform for an extremely short period of time, generally between 8 and 12 weeks per year, and not even 8 to 12 consecutive weeks, but 8 to 12 weeks in total per year. And this should lead you to question your strategies, your approach to the market, and we at Millennium are the first to do so. Millennium is another private community that you can join via the Discord link in the description. The private groups will reopen this week, and our role, I say "our" because we are a team of 7 to 8 people, is to handle all the macro, technical, financial, and fundamental analysis to assess where we are going in the short term, where we are going in the medium term, to make the best investment decisions. We have made very good positions since the beginning of the year, that is a certainty. However, the reality is that we are also trapped in the turmoil we have been experiencing for a few weeks. And we are the first to question ourselves to say, "Very well, what strategies will we be able to implement to adapt to the market, to become what are called cold-blooded animals, meaning to have a strategy that we will apply no matter what happens, whether prices rise more sharply than we anticipated, whether prices fall more sharply than we anticipated, etc., etc." And the conclusion to be drawn is to analyze data, establish statistics to make strategies and decisions that will be more efficient, mentally easier, and psychologically much more stable than everything we have done so far. And this is exactly the work we are doing. It is coming to fruition, and we will soon communicate to our community the new strategies we will be pursuing, which are based on stats we have been keeping since the beginning of the year, and which force us to adapt our investment model, which force us to adapt our behavior in relation to what the market is doing, in relation to our desire to make huge gains by being positioned primarily in altcoins. And all of this will allow the community and us personally to have strategies that are much more efficient, easier, and much more profitable. So if you want to benefit from it too, join the community and join the private groups as soon as they reopen this weekend. So for the short term, we said it, there is always this instability of saying that at the moment, the banking system is lacking liquidity. So, lack of liquidity means that in the minds of investors, the big investors we need to drive this market, there is a fear that we will experience a subprime crisis 2.0 like in 2008, in which many banks went bankrupt, creating a systemic domino effect, as we call it, which dragged the entire banking system into an unimaginable wave. So the origin would not be the same, but the consequence would be the same, and at the moment, it is a lack of liquidity in the banking sector. And naturally, as long as this continues to cause fear, investors will remain on the sidelines and wait for things to settle down and for liquidity to return to the market. So, we are once again hanging on the words of the Fed, which will tell us tonight if we will have a 0.25 rate cut as is priced in, or even if we could have a 0.5 point cut. This is not what is priced in, but it is always possible. It would be a big surprise for the market. It would be very beneficial in the medium term. But for now, what would be most beneficial anyway is 1. a 0.25 rate cut, 2. at least a halt to QT, and in my opinion, Jerome Powell should do it. He should do it first of all. He should do it first of all because we have seen on the Fed's balance sheet that they are reaching their limits. Bank reserves are being drained more and more, and this decrease in bank reserves, we can see, is really in free fall and it continues, it continues. For a week, it calmed down, it's picking up again, and it's not about to get better. We can also see this thanks to this chart here, which is the Overnight Reverse Repurchase Agreement, which is precisely the market where the Fed must intervene if there is not enough liquidity in the banking sector. When we look at the maximum zoom, we can see that it really started during COVID, there was more money, and so the Fed had to intervene by injecting billions and billions of dollars every day. We saw that during the period from 2020 to around 2025, there was a total halt in Fed interventions, a sign that there was enough liquidity in the banking system. And we covered this on this channel on June 30th to announce that it was starting to come back. This narrative of "there is a lack of liquidity and we need to stimulate the economy" or at least the banks, started to return with an intervention on June 30th of 11 billion dollars by the Fed. And what we see at the moment is exactly what we are telling you on this channel: interventions are massive and repeated. And since this month of October, we can see that it is really picking up a lot of momentum. We have 5 billion invested on September 30th. We have 4.7 billion on October 15th, 3 billion on October 21st, 3 billion on October 23rd, 3 billion on October 27th. You don't need to be a genius to see the momentum it's gaining. Interventions are numerous, and there is a real need to create liquidity, to create a lot of liquidity. And to create this liquidity, as you know, there are several ways. The first way, which is a huge stimulus, is to cut rates. Will the data coming out over the past week alert the Fed to the need to create liquidity massively and quickly? For some, there could be a surprise on the rate cut, which could be 0.5 points, or is the Fed currently considering saying, "Well, a 0.25 cut will be enough, and in addition, to stimulate the economy rather than lowering interest rates too quickly, we will simply return to a period of QE to buy government bonds and thus stimulate the economy by injecting liquidity through another stimulus, which is the second one the Fed uses the most." This is possible. It would avoid scaring the market too much, because a 0.5 cut would be hyper bullish in the medium term for a few weeks, a few months maximum, Q1 2026, but in the very short term, it could send a signal to the market that the situation is worse than we think. So we always find this paradox where when we release a bullish news, it can have a bearish effect in the short term. Whereas when we release bearish news, it has a bearish effect in the short, medium, and long term. Unfortunately, this is the game of financial markets, it is the game of risk markets, and we will never be able to change it. In any case, we have everything before us to observe that there will be an increase in liquidity in the coming weeks and months. And we must hold on. We must hold on. It's not easy because we know that even if Bitcoin remains more or less stable, altcoins are suffering. They are suffering enormously. And that's why I repeat, once we return to good times, we will have to adopt different strategies. Perhaps aim for slightly less return, even though I think that with the strategies we are implementing, the returns will not be affected. We will simply have more periods in the year during which the portfolio remains in the green, where we don't have to suffer for 4, 5, 6 weeks with our portfolio at -30% to -40% before being able to make positions that will reach +70% to +80%. There is nothing more to say about this market. So I'm signing off now. I wish you a very good day. See you very soon. It's ATRID. Bye bye.