Crypto ain’t dead; but is it cycling or supercycling?

Edward A Thomson
7 min readMay 16, 2022

tl;dr: it doesn’t matter, but here are some thoughts on the market in 2022.

This is not a solicitation to buy or sell any particular cryptocurrency or crypto asset. Here I share my personal views on the market which you mind find interesting or thoughtful. I don’t sell advice or manage money on a paid-basis at the time of writing this blog.

Summary of thoughts

  • I think we are still in the 4-year cycle regime.
  • We are probably in a crypto winter and I suspect many teams will survive, but not necessarily thrive in a later cycle.
  • Managing risk is important.
  • Patience is key.

Of timing and 4-year cycles

Newer entrants to crypto talk about how this time will be different and that they don’t believe we will have a crypto winter: “nah, I don’t think it will happen”. Contrast this to the old heads on crypto twitter taking an opposing view.

People who have been around for multiple cycles may sound like they stuck in the same narrative of 4-year cycles, but that’s what they know. That’s what I know.

Rather than argue against the crypto greybeards I suggest that it might be prudent to heed what they are saying. If the market is low and sideways for a a couple years, like 2018/2019 then are some obvious methods to employ. Low prices during a bear market are better for buying than fomoing into frothy bull markets. Dare I say that this bear market is a blessing?

Here is a sobering thread from Chris Burniske. Each of the tweets are worth reading.

No one can say for sure whether we are still in a 4-year cycle or whether we have transitioned to a new regime, but what we can do is manage our risk.

If this is a long winter then there is plenty of time to buy before the market goes into the euphoria state like we saw in 2017 and 2021. So buying today or tomorrow might be unnecessarily early. If you did purchase anything soon then I think there is a reasonable chance it will be up in 2025 anyway. Obvious caveat: depending on what you buy.

What does this regime look like? 👀

One of the best ways to visualize the 4-year cycle model is to look at the price chart, but better yet is the following chart from glassnode (h/t: DegenSpartan for sharing).


The following description of the chart I’ve pulled from the glassnode blog:

  1. Bull Markets (green zone), where sufficient inflow of demand exists to allow investors to realize significant profits, right into the market cycle top (net capital inflows).
  2. Bear Markets (red zone), where the converse is true, and declining prices result in a dominance of losses being realised by investors (net capital outflows). In 2019 and arguably late 2021, we saw profits taken into a brief bullish relief rally, that was ultimately sold into.
  3. Disbelief Recovery to Early Bull (orange zone), where the market trades sideways to upwards, typical of a re-accumulation period or disbelief phase, and realized profits start to exceed losses on a consistent basis.

Glassnode concludes:

In the current market, we remain within the Bear Market phase, where the market is yet to provide sufficient demand and price appreciation to enable sustainable profit taking and capital inflow. Should realized profits begin to outpace losses on a sustained basis, alongside stable prices, it may suggest a transition to Phase 3 is underway.

The glassnode blog has many more indicators that corroborate with each other and broadly describe the same market pattern.

What drives the 4-year cycle? 🚂

The most popular narrative for what drives the 4-year cycle is the Bitcoin halvening: i.e. when the reward paid out to miners is halved.

I’ve always found that weird as the supply is still increasing just at a slower rate. I don’t see that alone being enough to drive prices upwards, there also needs a growth in demand. Clearly, if demand is every increasing at a faster rate then I do expect prices to increase over time.

This leads me to ask myself:

  • How much of the 4-year regime is due the Bitcoin halvening and how much is just simply human nature?

The latter is really asking whether we would be stuck in a 4-year cycle anyway and that the halvening events are just a comfy narrative. We attach a narrative that we like to explain the market moves, but the causation could be more fundamentally tied to our own nature.

The typical phases of a market cycle

I think it easy is to misidentify causation and this is a favourite bugbear of Nassim Taleb.

In many ways it doesn’t matter what the cause of cyclicality is, but rather that we observe a pattern that repeats (rhymes) and that we manage our risk accordingly.

The biggest benefit to being stuck in such a regime is that the market structure is somewhat predictable, not in terms of precise timing nor magnitude, but rather than an opportunity is coming and you need to be disciplined and patient.

Can this time be different? 🕰️

Certainly. Something that’s played on people’s minds lately is the correlation between the crypto market and the US stock market, in particular the Nasdaq. Consequently, the crypto market has tended to react to statements from the US Federal Reserve. I don’t recall this being as prominent in the past as it is now.

So with that in mind, it is a little naughty to think we are necessarily stuck in the same 4-year model of crypto.

Here’s the rub, it doesn’t really matter if we are in a 4-year cycle or a supercycle. Both are just fine for growing the risky part of your portfolio.

What of the supercycle? 🚴🚴🚴🚴

My understanding of the supercycle idea is the idea that the crypto market has broken free from the 4-year cyclicality of Bitcoin. That while there can still be large draw-downs (e.g. May 2021), we shouldn’t see long winters as we have done before (2018/2019 or 2014/2015).

The only way to know if we are in a supercycle is to see it play out in hindsight. My feeling is that we aren’t in a supercycle as I describe in the above paragraph.

However, it almost doesn’t matter if you manage your risk accordingly: make sure you can survive regardless of whether this is a winter or back to a giant pump by end of the year.

In it to win it 🙏

Taking some amount of risk is necessary in order to grow the portion of money being risked. However, some decisions will be better than others: some decisions are more likely to lead to you being #rekt.

With the information so far let’s figure out how to draw a conclusion. I think we should ask ourselves these questions:

  • Will the crypto market ever recover and if so does it matter how long it takes?
  • Does it matter where we place our bets?

If you have already drank the crypto kool-aid then you know for sure that the market is coming back, one day. Given that to be true, then we should consider which projects will survive such that their tokens are not completely wiped out.

Survive then thrive? 🚀

Perhaps Luna is dead now (maybe not?), but Bitcoin and Ethereum are likely to survive. This is not a rallying call for maximalism around either project though. I have previously held BTC and ETH but not currently.

I suspect that the BTC and ETH will increase in price in a future bull, but these gains will likely be smaller in percentage terms that previous cycles. Perhaps it’s BTC to 150k or 200k and perhaps ETH to 16k. I don’t know.

These two projects are perhaps as safe as returns will get for cryptocurrency projects, obviously I give no guarantee on that. There will necessarily be projects with greater returns, but be aware this comes at the expense of liquidity (which I won’t go into here).

The tricky part is that many projects will survive, but not clear that many will thrive.

For example I was unimpressed with the Tezos price action. I’ve never held any, but for me it is an illustration of a project surviving but not quite thriving. That’s my observation of XTZ in 2021, but next cycle could be different. I don’t know.

Picking winners is not something I will go into here, I don’t know that I necessarily will do that better than anyone else, but I think understanding the markets cyclicality is more important. Once that is understood, then you can figure out how to place your bets.


Perhaps now is the time to buy, but perhaps the market will go down further.

  • Can you survive the feeling of the market going down even further?
  • Is there a reason to start aping right now?
  • Will you miss the coming bull market because you didn’t buy today?

I can’t answer those questions for you. Only you can do that.

My own feeling is that it is slightly too early, although I did buy a couple things this year already and now down on those positions. :-) We are talking about tiny fractions of my overall portfolio though, so the risk is fairly negligible.

Betting too large now then getting wiped out would be silly. I think we will get better clarity in the coming months.

Another sobering thought from Chris Burniske, but here on timing the market:

I am once again asking you to be patient and manage your risk.


About me🎯

I spend the majority of my time worrying about not being wiped out by the crypto market. When I find spare time I enjoy chatting to new teams just starting their journey in the industry.

Previously, I work at the Web3 Foundation (mainly running the grants program) which launched the Polkadot network.

I’m on Twitter: @EAThomson.