Transcription
When we talk about the famous alt season, there are two elements that need to be brought back to the forefront. The first is time and the arrival of new retail investors on the market to absorb the sales of large holders and those who were present in the market before them. We will address these two elements, and if you don't want to mess up what follows, you really need to follow this video to the end because you will see that the elements repeat themselves, they are cyclical, and this has been the case for over a century.
We'll start with a quick reminder that everyone has in mind but quickly forgets: it's the time it takes for an alt season to arrive. An alt season, to recap the principle and definition of this word, is a period of time during which altcoins perform better in percentage terms than Bitcoin. It's not necessarily a time frame in which all altcoins do X6, X7, or X8. That's a popular belief. All we want is for altcoins to rise faster than Bitcoin and to generate very interesting profits. Statistically, you've seen this for a very long time, but a reminder doesn't hurt. There are many periods during which the market does absolutely nothing at all. What I mean by "nothing at all" is precisely a phase of a large range, like we had here between 2018 and 2020, or here, as we've had since late 2021 until 2025-2024. We are looking at Ethereum, and we can clearly see this pattern unfolding, with almost 90% of the time spent in a large range. We emerge from a bull market, establish an accumulation structure, then begin to see the bullish extension that reaches the top of the range before breaking out upwards from this famous range and entering a parabolic phase. You can see that in the last cycle on Ethereum, we remained in a range phase for 1085 days. Then we were in an extension phase for only 133 days. So, there are barely 10% of the time during which we have these famous bullish extensions that caused Ethereum to gain 214% after exiting the range in just 3 to 4 months. Since 2022, it's been the same, and the pattern we are in right now, right here, strongly resembles the one we had right there. Admittedly, here we had already broken the range upwards, but in terms of macroeconomics, in terms of periods of asset rotation turmoil, etc., it's truly the same period we are in now. And if we schematically project, for the sake of example, what happened after exiting the range as soon as we had the resumption of this parabolic phase, a 214% increase would bring Ethereum to a target of $11,000. A target that, at the moment, no one is pricing in, so violent are the corrections, so long they are, and they plunge everyone into a truly profound despair. The lesson we learn from Ethereum here is always the same: the market transfers money from the impatient to the patient. And the paramount lesson to draw from this is to be on the train before it leaves. We don't know when it will leave. We know when we are getting closer to the departure, and if you watch my videos, you see that we are extremely close to this famous starting signal. So, what is most important right now is not to make hyper-risky moves like selling here to expect slightly lower prices. No, what is most important is to be in the war machine once it starts at full speed because we know it starts very quickly, it starts very strongly at a time when everyone expects a new correction, a new bear market. And we have these psychological conditions right now. The fear index is extremely low. We had a correction that was trying, but as you will see, it was not as trying as what we have experienced in the past. If I take this famous bubble we are in right now in 2020, the equivalent of this bubble plunged by -36% in an extremely violent correction over a week, just like we just experienced, whereas today we experienced this correction of barely -30%. So it was still very violent, but we have a remarkable ability to forget because we just had a correction here that was a less profound correction in 2021, just before Ethereum's enormous rise.
If we move away from Ethereum and look at the chart of Altcoins right here, on a weekly chart, let's remember that these are all cryptocurrencies after the top 10. We see that it's the same pattern for the entire crypto market, repeating on a huge range that, from 2018 to 2020, also lasted about 1100 days, with a much flatter phase than on Ethereum. And in just 140 days, you can see, we had an ascent phase that was simply enormous. This phase, once we left the range and passed the previous high of the last cycle, resulted in a 444% increase for all altcoins after the top 10, which is a 5.4x increase for the entire crypto market. Top 11 to the last cryptocurrency. And we see that right now, we are still not out of this famous accumulation range right here. But once we exit it, the same pattern will repeat with an ascent that will be tremendous, that no one will anticipate, that no one will expect. And the most important thing here will have been to be present on the train without completely destroying one's portfolio because of greed, because of leverage, because of selling out of fear that the market would go lower. No, now is the time to position yourself, now is the time to be in the market because once it takes off, it's too late, and you absolutely must not FOMO once prices reach completely insane levels on all cryptocurrencies.
The second element will be to understand the conditions that lead to a bubble. And when we say bubble, the element that precedes its burst is ultimately the parabolic phase we are all waiting for. And here you have the seven cumulative conditions that must be met and that have been found in all historical bubbles that led to a parabolic phase. We've known these for over 100 years. Here, we are looking at the Dow Jones chart in 1929 during the biggest market crash, which led to a crash of about -90% in the stock market at the time. You can see it was a violent crash, and we find conditions that are very similar to what we are experiencing now. The elements that lead to the bursting of a bubble and especially the formation of a bubble are as follows. Prices start to become too high, which is not yet the case at the moment. We have what is called a higher price appreciation, meaning that the higher we go, the more people call for ever higher prices, for a bull run that will never end. And this is the trap, as you know, because it leads people to be hyper-greedy, to use leverage, to expose themselves through debt to aim for higher targets, when in reality, well, we will crash to the ground and everyone will lose all their money. We also have a hyper-bullish sentiment through the media, and also through consumers. And the point that is extremely important, which is divided into two, are points 4 and 5 here: purchases financed by leverage, by debt, and especially purchases accelerated by speculative products outside the banking system. What we call speculative products outside the banking system are all investment or financial vehicles that exit the traditional banking system. The traditional banking system, as its name suggests, is banks. And what happened in 1929 was first a phase of rate cuts from 4% to 3.5% by the Fed, while the stock market was already reaching new highs. We find the same schematic as we have had since September 2024, where we had a first rate cut while we were at historical highs. What is quite interesting is also to look at the timeline. We see that the rate cut was made in '27 and the crash arrived in '29. We had 2 years of movement between the first rate cut and the bursting of the bubble. And if we follow this paradigm and take 2 years after the first rate cut in September 2024, our crash would arrive in September 2026. A simple coincidence, but I wanted to point it out. And what actually happened is that during the acceleration phase of the bubble, we had precisely this famous point 5, which is the multiplication of speculative products outside the banking system. At the time, in 1929, there were no ETFs, there were no online exchanges where you could connect with your computer. No, you had to go to your broker, you had to go to physical exchanges like Wall Street, for example. But what happened and what appeared and gained traction were investment trusts at the time, meaning financial structures outside the banking system where you could put your money with leverage, with debt. And this allowed one thing: to enormously accelerate the inflow of money and especially point number 6, the arrival of new buyers and new investors in the market. Here, you have a curve of trust creation year by year from 1915 to 1929, and you see that from 1927 onwards, we really entered a phase of hyper-acceleration in terms of the creation of these financial structures, and this brought many new investors to the market. And it's logical because these trusts are created by banks, created by investment funds that have thousands of clients. And these people have every interest in their clients investing in their financial vehicles to earn commissions, to expose themselves even more. And so they actively approach their clients to tell them, "Go ahead, buy, it's safe, you'll make X profit because for so many years, we've been rising at such a speed." And that's how the powder spreads. People start talking to each other, the media talks about it too, and we see the appearance and formation of the last phase of the bubble, which is precisely the parabolic phase, the arrival of new capital, new retail clients, and then the explosion of the bubble.
And so, you're going to ask me, what's the connection to 2025-2026? Well, the connection is that today, we no longer talk about trusts, but there are very speculative structures appearing that are also gaining traction now, that are not seen as a danger, but that will precisely lead to this phase of hyper-acceleration. And what are these structures? They are ETFs. So we have ETFs being created that were initially spot. There's no leverage, it's spot, you buy, you sell. It's not really a speculative mechanism. However, what is starting to appear and will appear from the end of this year are purely speculative leveraged ETFs. So here, for example, you have the list of leverage, you have the list of leveraged ETFs that will appear by the end of the year, you can see December 2025, which allow leverage of X3 up to X5 on not only companies that are already at historical highs like Google, like Nvidia, like Palantir, for example, but you also have these ETFs arriving for crypto, Bitcoin, Ether, Solana, XRP, and also for the VIX. We have X3 ETFs, X5 ETFs, and this is only a part of the ETFs that will be created. You can follow this page, and you have the entire list of ETFs that are being created and that globally have an application date for December 2025. So by the end of this year, there will be a huge number of ETFs in the crypto market and in the traditional market that will arrive, and coincidentally, they are leveraged ETFs in which a lot of money can be invested, and this will drive a lot of people to the crypto market and to the traditional stock market.
If we stick to the crypto market, you can see the entire list of ETFs here, how many there are. You should know that the first one appeared just a few years ago, and we are really seeing a hyper-acceleration in the creation of these structures. And the creation of these structures really resembles the creation of the trusts in 1929, which drove a lot of retail investors, a lot of new capital, and this was a trigger for hyper-acceleration in asset prices at the time, and it will be the catalyst for massive acceleration in the prices of our assets, which will prepare the bubble for bursting by the end of the year at the latest. Here, you can see that Claude generated the number for me, a curve with the number of trusts that were founded. I asked Claude to give us a projection regarding all these crypto and traditional market ETFs that will be created and are being created since 2022. And you can see that the curve is really ascending. Now, be careful here because this rectangle represents all the crypto and traditional market ETFs that are being created from last January to October. But if we consider everything that is due to be applied by the end of the year, it's this rectangle here. And you can see that we are really on an enormous ascent. We were at 43 crypto ETFs last year, we are at 50 by the end of this year. Next year, we will be at 120 ETFs. We were at a total of 746 in 2024, a total of 950 in 2025, 1100 in 2026, and it's only increasing. And so this will be a huge speculation machine that will bring a lot of retail investors to this ETF market with, as we've seen, many purely speculative ETFs with a lot of leverage.
The last point to consider is a point within crypto itself, and that is lending protocols. So, you know, there are many lending protocols right now, with Ave being the undisputed leader, and others are appearing with very good data. And here you have the total value that is locked in these lending protocols in terms of loans. And what you can see is that we are really making a parabola right here since the beginning of 2024, we started and we are really beginning to make this parabolic movement that will accelerate further. This is a sign that, whereas during the subprime crisis in 2008 or even in 2000 or 1929, a lot of money was borrowed to speculate. This is still the case in the traditional system, but we also see that in crypto, it's really starting to happen. This also explains why we had a crash last week. It's because we have a system that is truly a "subprime beast." That is to say, many people are exposed to leverage, but many people are also exposed on lending protocols by putting up collateral and then taking out loans with which they can speculate with leverage. And so this can clearly degenerate once the bubble bursts. It can clearly degenerate because the first domino to fall will be the collapse of a crypto that is not properly backed, that does not have good financial data, that is correlated, and that perhaps has another cryptocurrency as collateral, which itself will then fall, then another, then another, then another. And this will really lead to a significant bursting of the bubble.
Now, what we need to discern at the moment is the formation of everything we have, all the elements to have this famous bubble that we haven't had yet. And these elements are right before our eyes. We haven't talked about macroeconomics because we discussed it in the last few videos. Here, we are focusing on the financial elements we need to have a speculative bubble, and we have them all before our eyes. So, it's not now that you should exit, it's not now that you should panic when the market is doing its final checkout before it takes off very quickly, very strongly. Now is the time to position yourself on very good altcoins because the starting signal will be given, and all those who do not take a position will be left behind. Have a very good day, have a good weekend. Bye bye.