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Sean C

@cove

629 Following
1700 Followers
Sean C pfp
Sean C
@cove
Mint deploy on @zora. A poem inspired by finance @eco.
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Sean C
@cove
Tactical advantages.
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Sean C
@cove
If it was easy for everyone to understand breakthrough ideas, they wouldn’t be innovative.
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Sean C
@cove
14/15 This is the natural market cycle. Similar to traditional business cycles, and actually healthy. Market crashes clear bad investments and create a healthier economy.
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Sean C
@cove
15/15 Yes, things are different this time! Bitcoin is becoming politically relevant. Crypto is becoming genuinely useful for some people. But human psychology remains the same. People will always get too far ahead of themselves when times are good.
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Sean C pfp
Sean C
@cove
14/15 This is the natural market cycle. Similar to traditional business cycles, and actually healthy. Market crashes clear bad investments and create a healthier economy.
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Sean C
@cove
13/15 These factors combined - profit-taking plus overextended investors - guarantee that eventually the vibe shifts from "euphoria" to "actually I'm getting nervous." Then it cascades.
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Sean C
@cove
12/15 Institutions practically have to take profit: VCs need to show returns to LPs, hedge funds need realized gains, and everyone has tax liabilities to cover.
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Sean C
@cove
10/15 When you've invested more than you can afford, it doesn't take much (an unexpected car repair, or small price drop) to start panicking.
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Sean C
@cove
11/15 There are structural factors too. The low for BTC was ~14k. If BTC hits 200k, that's massive profit. When prices rise significantly, especially quickly, sophisticated investors will take profit.
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Sean C
@cove
9/15 These behaviors are inevitable if prices rise too fast or for too long. And they HAVE to correct.
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Sean C
@cove
7/15 Then the psychology kicks in. When times are good for too long (or it happens too fast!), people start doing stupid things with their money.
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Sean C
@cove
8/15 What does this look like in crypto? People buy way more than they can afford FOMO becomes overwhelming Some take out second mortgages VCs invest at crazy valuations
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Sean C
@cove
6/15 When all-time highs hit, that's when the general public jumps in. This is where things get shaky. The average new buyer is less informed and likely getting info from worse sources.
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Sean C
@cove
5/15 At this stage, prices move up mainly because 'smart money' already in crypto realizes a shift is happening. Take Q4 2023: BTC ran from ~25k to ~42k, mostly due to existing crypto investors increasing their positions before the ETF approval.
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Sean C
@cove
2/15 Read the full blog post and subscribe here: https://capitalcontrol.substack.com/p/why-crypto-will-crash-again
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Sean C
@cove
4/15 Here's how the cycle starts: First, only true believers care. Then gradually, new things get built, or outside catalysts bring attention to the industry.
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Sean C
@cove
3/15 There are two main reasons: human psychology and market structure after a sustained bull market. This is essentially Ray Dalio's economic cycles, but operating on hyper-speed because crypto is global, easy to access, and memetic.
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Sean C
@cove
1/15 I want to take a moment to explain why crypto will crash again. It's inevitable. Even though I believe crypto represents a new asset class - the foundation of the internet economy! - it will still crash. Here's why 🧵
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Sean C
@cove
Most people underestimate how complex simple systems need to be to remain simple at scale.
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