[00:01] hello a four-year journey followers this is Bob Lucas on Thursday the 12th of March hope you're doing well another installment of the series here talking about Bitcoin the four year journey the four year cycle and what I see currently unfolding now clearly we have a significant event unfolding here a massive worldwide liquidity event across all asset classes across all markets we
[00:31] are seeing pretty much I won't call it unprecedented type of action but certainly top 5 for the past 100 years in terms of the types of events we're seeing unfold across all asset classes and bitcoin is no exception to this there is no no real such thing as a safe haven or a risk off or a hedge type asset in a liquidity event and that's what we're seeing right now currently
[01:02] seeing he run to cash a run to US Treasuries for example not even gold is immune at the mo immune at the moment to this sell-off and again bitcoin is no exception in past videos I had been asked the question what happens to Bitcoin in a recession and I had said in those videos that in a liquidity event so the initial shock of a recessionary type event or a Black Swan event call or
[01:32] what you want that Bitcoin would get sold off indiscriminately just like every other asset would when there's a run for cash when there's a need to fulfill margin bitcoins just another asset class and it will get sold off and we're seeing exactly that unfold right here where we see this massive decline here taking out the December lows which personally as I've said in previous videos I thought would hold based on the
[02:02] way Bitcoin has traded in prior cycles whether it's a one-year cycle or four-year cycle I had assumed that this is six to seven month fifth five percent decline marked the end of the reversion back to sort of a mean coming out of the four year cycle Louis certainly by how this trade adhere more recently that was my expectation now that's clearly wrong we have not taken out those December lows on what is again
[02:32] a liquidity event in such events you can pretty much throw out your technical analysis and classical charting ability the the market really does not care about any sort of line trend line moving average whatever you want it's not going to respect anything like that people are not geared or positioned or trading off some of these pivots or some of these levels essentially its indiscriminate selling leverage selling at this point
[03:03] as well and you know obviously you're seeing the impact right here in bitcoins price you also need to consider that bitcoin is only a one hundred ten billion dollar network or market cap maybe as of last week or the week before it was a 130 or 150 billion dollar market cap but when you consider the leverage markets that are out there and when you consider what 150 billion
[03:35] dollars means from a global standpoint a global sense it really is just a drop in the ocean so in a liquidity event like we're seeing right now an asset class like bitcoin is going to get thrown around like any object would say in your vehicle during a crash it's just going to get you know bumped around and thrown around and again we're seeing that and also when you consider that out of the 110 billion in market cap if half of the
[04:05] coins are not traded and not moving they're in cold wallets they're in storage or they're lost coins then you're only talking about sort of a 50 billion or 60 billion in liquid BTC that is potentially moving so the market is so small I mean the the overnight repo actions are 150 billion apiece last few nights so the entire market cap of Bitcoin is is being sort of traded in different asset classes so again in
[04:38] these types of environments it's basically hunkered down and let's see what comes out on the other end the other question I've been getting a lot of is did I sell am i selling what am I doing with my Bitcoin and the answer is simply I'm not selling a single coin at this point I didn't get in to Bitcoin to get shaken out by a move like this selling in not after a 40 percent decline didn't get shaken out didn't come close to thinking of getting out after a 55 percent decline over seven months something I'm not gonna get
[05:08] shaken in a position right here the reason for me the reason for getting in early on a four-year cycle here is precisely to have a strong hand in a market in the belief that this for me is an investment and not a trade I trade all the time Bitcoin on the shorter timeframes with the goal of increasing my Bitcoin but from a huddle and from a four-year journey standpoint this is an investment it's an investment I believe in and for that reason I'm holding on to
[05:40] my Bitcoin because I believe 110 billion in market cap does not represent the true value of Bitcoin and to where I believe Bitcoin is going in the future I've also said in numerous videos perhaps maybe in every single video that nobody ultimately knows where price is heading for Bitcoin or for any asset class if it was that easy and if we knew in if definitive terms and absolute
[06:11] terms then it wouldn't be a question we would just know but we don't know we don't have a crystal ball and we plan for these events and we plan for these events by having the right mind for mindset and the right allocation it's the reason why I've stressed from the very beginning that I don't want to have more than a 10% of my so trading or investing port Folio allocated something like Bitcoin because it is an extremely volatile
[06:41] asset it's a new technology it is still yet to be fully tested and we just don't know what the possibility is I said going into this that bitcoin is a type of asset that eventually could go to zero well if not zero to a much lower price even perhaps as low as or below the prior four years cycle that's always been a possibility not an expectation but a possibility and for that reason a allocation needed to be sensibly sized
[07:14] and positioned for that potential the other reason for having a reasonable allocation was that the potential the upside that we were talking about based on its history based on where it's gone where it's come from or it's gone and extrapolating that out further from a market standpoint but also purely from a classical or a trending standpoint the possibility is there and I continue to believe in is 100% there up to that
[07:44] $100,000 level and above the question is timing and the question is being patient unfortunately too many people who have bought into Bitcoin see only the one side of that equation they see only the upside potential and they are motivated by greed and not through logical thinking just like any other investment or allocation of capital that I put to work for me it's an investment and
[08:15] investments and every investment comes with risk every investment comes with possibility and potential and it's with that in mind that I allocate my capital for me there really is no place for feelings and emotion when it comes to an investment when an investment becomes too emotional for you it means that you have invested far too much we have risked far too much or your expectations are really not grounded in the sense
[08:46] that you understand and appreciate the risks understand the potential or you're pretty much looking at is the potential and what that potential might mean to you from in terms of a life-changing event and you become blinded to that to that outcome or that possible outcome to the point where it all becomes extremely emotional or stressful for you so when we encounter moments like this as we're seeing here or for example this move here you pretty much don't know how to
[09:18] handle a situation like that because again you're emotionally too invested so I'm just gonna warn you here when you approach an investment from a position of greed you end up basically with a position that only allows for one direction or one outcome and I feel that many of you not necessarily followers who have been on board from this from the beginning but many folks who get into this type of space lack the investment discipline and don't
[09:48] appreciate that an investment has risk and as a result they find themselves today in a situation where they will be unwinding or I have already unwanted their position for yet another loss even though Bitcoin from the four-year cycle low is still up 80% now it's up 80% in just sixty five weeks so a little over a year and 15 months the asset is up 80% so just going to put this in perspective again exciting this is how I view my
[10:19] investments up eighty percent from the bottom of course nobody catches the absolute bottom but even from the first video up around 60 or 65% when you look at the stock market down you know 25 27 percent here in the US and around the world something similar you look at crude oil down 37 percent you look at silver down 20 percent we look at the 10-year yield or Treasuries up considerably then you start to begin to realize that you know bitcoin hasn't
[10:49] done this so so poorly right it's all about the discipline that we talked about but unfortunately what a lot of people have done is they did not heed the warnings right they did they were too fearful down the bottom here and waited and waited and waited and they got really excited up in this area and they bought hi and they said fine that's okay because it's going to 20,000 we're going to a hundred thousand so you know what's what's the problem type of thing but of course again they were positioned
[11:19] too too heavy and then when the market moved lower over a longer period of time grinding lower and grinding lower it was too much to bear and they became too fearful and they sold out and again just more recently people started climbing back in even after selling I saw a lot of people say well I'm getting out right here this is enough I can't take this anymore even though you know it was still up a hundred and twenty or percent from the from the bottom here but again they got out and again they got back in here
[11:50] because it moved fifty percent higher so you see the pattern if you're not disciplined with your investing and you focus too much on the greed then you're susceptible to these massive price swings and to to sentiment across the board when everybody else apparently is making money then you should be me feel as if you should be making money and you're making the wrong decisions at the very long time and I suspect a lot of people right now today and making the very wrong decision by getting out of this market and going to be regretting
[12:20] this in the future now I'm not saying this is going to bounce right here I'm not saying it's gonna rally tomorrow and not look back but when you have the right allocation to Bitcoin like I said 10% of your allocation of your worth you can afford to sit back and just wait it out and sit on the timeframe that you intended to invest on my time frame is a four year cycle meaning I expect the top to occur around two and a half to three years from the lows which means we're 15 months in an unexpected hop to a curve another year
[12:51] to 15 months that's my time frame that's my horizon as far as I'm concerned I'm up 60% on an asset in just 15 months and all I had to do was wait and be patient and wait it out and when I saw these declines I essentially said well again I'm trading on a four year time frame I'm not trading on a daily time frame I have a futures account and a separate trading account that very reason and I look at those trades differently because they are based on a different time frame but for
[13:22] you on the four-year journey your time frame is this longer period and yes we're down there now we have a new low that we have not seen since last year since May of last year so of course that is not constructive but it doesn't mean the cycle has failed the cycle does not fail until we get below the four years so I will know at that point clearly way way below where we are today but when you look at the last four year cycle as well and you go sixty-five weeks out
[13:52] from the law so in 2015 time frame you go sixty-five weeks out Bitcoin was sitting a hundred and twenty percent above its lows right now it's sitting eighty percent above its lows but just yesterday it was sitting something like well let's work it out just yesterday it was sitting at a hundred and sixty-three percent above it slow okay and today it is still sitting eighty-two percent above its lows so we
[14:23] have to keep that into perspective and keep that in context also when you look back at the 2015 and 2016 time frame as it moved higher and higher over a month to month to month basis you see on the weekly chart and the daily chart some massive wicks lower some thirty to forty percent wicks lower as well so there's a good possibility that in the ten year time frame moving you're looking at bitcoins ten-year move its trend for example it's possible or it's actually
[14:53] likely as well that we could see this here being just one of those types of wicks on the weekly time frame okay that's the potential that's still out there and I don't plan on giving up on that potential because the market is down lower and said also improve his videos that if you are too exposed or to leverage to the point where you cannot handle a drawdown and a significant drawdown then reduce your position now
[15:24] or at that point because the market will force you to reduce that position purely out of of capitulation or liquidation in your account as far as I'm concerned my belief in Bitcoin and its narrative of a store of value the understanding of where society in general is going from from an innovation standpoint I still firmly believe in bitcoins role as digital money in the future and the
[15:54] future society that we're going to be living in and for that reason I'm comfortable holding through this period I'm comfortable holding through a lower decline as well because again my average price is low enough where I'm comfortable to do that but I'm also comfortable when I've said this before in risking most of my allocation to Bitcoin over time so even if for whatever reason we no longer follow in this four-year cycle the trajectory that
[16:24] the market has shown us over the last 10 years so if that nice big linear move up has ended for whatever reason I'm gonna be ok with that that was not my primary expectation going in but I still believe firmly that Bitcoin is going to be heading up into the high high market cap numbers well above where it stands today I just don't know if that means we have to go through some more pain first to get there that's always been a possibility and it's one
[16:54] I'm willing to take a ride on if it does eventually go that far now now we've seen panics in the markets many times before I obviously trade it through the 2008 period and I was involved heavily with gold and that time and gold was supposedly you know the safe haven asset of the time but even in that extreme liquidity event gold fell by a 30 or 35 percent in a bull market run and it did
[17:24] that for a month or two and it continued to go lower but then it sharply reversed and once it reversed it didn't look back and kept on going and doubled from that point and actually some more so I'm not hit again to to sort of predict otherwise but my belief here is that once this current liquidity event stabilizes and I think it will stabilize soon when I look at the stock market and some of the other asset classes here they have I mean they're as overbought
[17:54] so oversold obviously as as much as we're probably seen even even compared to 2008 as well there will come some stabilization those markets that we will see global response from an economic standpoint we obviously are seeing central bank responses as well the liquidity aspect of that I don't think we have a the same type of banking problem that we had in 2000 there will be stabilization and I believe that once the market stabilize and then the
[18:25] coronary event subsides we will see a recovery in bitcoins price and I think that could be with coupled with the extreme policy response that we see from a fiscal standpoint and also from a monetary standpoint I believe the amount of liquidity that's going to be flushed into this this world economy the amount of money printing that's going to be put into this well economy is eventually gonna help the Bitcoin narrative and something that's going to flow into Bitcoin and some of it will become sort
[18:56] of a flight to safety as well again once that liquidity event subsides so kinda sum up here all I can really say to you is you need to look at this from a long-term perspective you need to have the right science I've been saying this in every single video you need to be able to sleep at night and you need to not feel the urge or the need to check on price every single minute especially in an environment like this and it certainly should not be creating stress
[19:27] if these big moves higher like we saw here and here create far too much excitement for you and if these big declines lower create way too much fear and stress then that is clearly the definition of what a over-leveraged oversize position is get yourself a small and comfortable allocation especially now a price down in this area and commit to the long term and be happy
[19:57] with what the market gives us and if that means that we have to suffer through a deeper drawdown or a more of a sideways accumulation phase over the next two months or six months or eight months and so be it that's what will have to be there is no there are no free runs or free rides in the investment world never is never will be and bitcoin is selling you no exception just because it's done you know what it has done in the past in a certain style and a certain pattern it doesn't mean it
[20:29] needs to repeat itself right here how it gets to that point paya is really anybody's guess in the end and I guess really in hindsight hindsight now looking at that this big move here was kind of first clue that we weren't going to get the same type of nice arcing move higher from one low to one high in a four-year cycle like we saw in previous cycles if this move here has already fooled I already fooled way too many people this one did as well this the third one up has done as well and clearly this
[21:00] fourth one here has taken the majority of people by surprise this is not a normal looking when I said normal it is normal it's a market right it's price action but it's not anything like prior cycles so we need to stop thinking and comparing two prior cycles we just need to look at the longer term potential the longer term trend and formulate the investment strategy and narrative around that long term trend and the long term your belief and fundamentals that that
[21:33] we feel bitcoin have today and lastly with that said let this be an investment lesson for you this is not hopefully the last time that you will be investing whether it's Bitcoin any other Kryptonian class in general think about the journey so far think about some of the decisions you've made when you made those decisions what price was doing at the time you made those decisions what you were thinking what your emotional state was like what your expectations
[22:03] were like and learn from that process learn from what you did at certain times whether it was down in this area whether it was up in here or here or here learn from what you were doing if you did it all correctly then kudos to you but we always can learn we can always improve and you know let this be a lesson for you even if the experience at the end is not what you thought it was going to be hopefully it's going to be more than what you thought it going to be but in the end learn from this because this won't be
[22:33] your first and sorry this won't be your last and hopefully you have plenty more and many more successful opportunities to come but stick with this don't give up hope at this point not after a decline of this nature right here again think of why you're involved why you got in and it was purely for the money and purely for the greed then rethink that and resize reallocate and come back with a different mindset thanks very much for listening all the best and speak to you soon