The 2024 Crypto Bubble Just Burst—What Happens Now?
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I remember in the second half of 2023 when I was having a tough go with the crypto market. It was September of that year and after calling the March banking crisis low to the hour the market had essentially slowed to a halt from April until October.
It was a brutally slow stretch and most people were still on the fence about whether or not we were in a bull market.
I belived we were with the confirmation of the March low and you can see how I called it exactly at that time the beginning of a new bull market with prices of BTC at 19k.
However, that faith was religiously tested by September when I decided to reach out to a mentor of mine and great analyst in their own right. The issue was that this person coming from a Wall street background was very pessimistic about crypto and told me that the market had experienced a dot com bust similar to 2001 and would not recover.
That moment became a turning point—I chose my own analysis over a respected mentor’s, and it paid off.
That one decision to follow my gut proved to be true and BTC took off within just a few days of that conversation and over the course of the next few months went from 25k to 75k in early 2024.
However, fast forward a few years from that day and it turns out this person was actually right. Just not about bitcoin.
Today, I am going to show you why we have clearly seen the great echo bubble that GCR predicted and why it’s akin to the dot com bust of the early 2000s and finally what I believe it means going forward in the next months and eventually years.
Get ready because the evidence is compelling and it’s all in the charts.
When I first had that conversation with my mentor they told me that BTC was going down like pets.com did.
That turned out to be false but the reason why is different and the conversation around BTC today has changed dramatically.
In the early cycles it was thought of as a currency which most people think cryptos are. However, it has now matured to the status of a store of value which is much more important.
People are seeing it as digital gold now or if you’re like Michael Saylor, digital real estate.
So, with BTC’s role evolving, the question becomes: where does that leave the rest of crypto?
In my view there really is no argument to be had. You don’t compare your stocks to the price of gold do you? Or even to the price of real estate? No they are their own asset class. Stocks serve as a speculative vehicle while real estate and gold, for the most part, serve as stores of wealth.
So to me the argument is solved right there. On the flip side of that, just because you own gold in 2008 does that mean you shouldn’t buy Amazon stock or Nvidia stock?
I would think you would like to own some of both.
Gold is a sure bet, it’ll go up in value and keep you safe but Amazon and Nvidia had the potential to make you very very wealthy.
I see the same parallels in crypto
BTC is a clear store of value that will go up and keep you sleeping at night.
But other blockchains like ETH, SOL, and XRP have the potential to be the economic and application layer of digital transactions.
Again, people don’t transact in gold or sell shares of their real estate to buy goods. The more BTC cements itself as this store of value the less likely it will ever be transact-able at a high frequency.
As where on chains like ETH and SOL, we see stable coin usage as one of the biggest drivers of adoption. The ability to facilitate permissionless global payments 24 hrs a day seven days a week is nearly priceless.
But getting back to the main argument that Amazon stock is not a store of value, but what Amazon does has become so critically important to everyday life for most Americans that it is a huge facilitator of the economy.
People watch movies, order household goods, and buy food all on Amazon.
Similarly Apple, is not a store of value but without their products and apps most people would not know what to do.
These critical pieces to todays economy have resulted in thousand of percent gains for the long term believers.
It’s the same place blockchains are heading.
ETH, SOL, and XRP are not stores of value per se but in the future they will be apart of everyday financial transactions and necessary to use.
We could get a lot deeper on those use cases but the idea here is that I really want to draw parallels to what we saw in the 2000s dot com bust and the subsequent echo bubble in tech and where we are in crypto today.
These cycles repeat and the 20 year between the internet boom and the crypto boom are uncanny.
Beginning with the echo bubble in alts, it was apparent early on and the warning signs appeared to us in our own portfolios.
Take KUJI for example. I have shared this one before but it was one of our earliest picks. Early in the bull market it pulled a 10x just to its previous highs from 2021 briefly and then completely crashed and never came back.
That was in 2023. Nearly everything else that followed did the same thing. It’s why it is so important to watch the market leaders and understand that they are always signaling the moves first.
The same thing happened to ETH above. It was the market leader as it was the first to bottom in June of 2022. However, trouble started all the way back in March of last year when it failed to make a new high while BTC did. That was another early warning sign.
Finally, SOL. Again, we see the same pattern here. Later to bottom and the last to the party but with the biggest and fastest run. This is exactly how a market works. The last investments to pump usually do so the fastest but also signal the end of the cycle.
In short, it’s my view that ETH led the cycle and SOL finished it. When SOL took over that was a sign things were nearing the end. Similar to how ETH took over in 2021. Anyone remembers how fast and hard gaming tokens and NFTs pumped as they were the final phases of the cycle.
It’s not at all dissimilar to the dot com boom and bust and it happened exactly 20 years following it which as you all know is a very important cycle.
At the peak of the 2008 real estate bubble the dot com stocks that survived did not make new highs. At best they made double tops. In essence they had an echo bubble.
This is a real phenomenon in markets where people get so mugged by the market that they don’t return for years. That is in my view what has happened since 2021. People lost so much money in the greed of FTX, LUNA and 3AC that they will not return for years if ever.
It’s why we never saw that true retail wave this cycle. Sure, there are some new participants and more people coming into the industry but only slowly compared to the boom of 2021.
Many companies, VCs, and builders went bust in the last few years and will never return. It has become a survivors market where the chains and the companies that have made it to 2025 and beyond will likely be building the Amazons and Apples of tomorrow.
So the bad news is we had an echo bubble but the good news is we are heading into what I think will be a very very big macro cycle and long term trend in crypto.
In fact if we go a little further into our BTC is gold and other blockchains are equities argument its actually a very encouraging picture.
The above chart shows gold before and after the dot com bust. Before it really hadn’t gone anywhere since 1980. After it ignited a huge long term rally that has lasted 25 years now and pushed prices over 10x what they were in 2001.
Compare that to the tech heavy Nasdaq. It crashed massively in 2001 and did not make new highs until nearly 20 years later. Similar story to what we are seeing on our TOTAL 2 chart which excludes BTC from the crypto market cap
We see that the market has pushed up just below previous highs and stalled out.
Now, I’m not trying to alarm anyone and I’m not saying it will be a 20 year bear market.
I’m actually going to show you why we are closer to the end of this echo bubble and a new very long term uptrend and not a brutal multi year bear market.
ETH vs Amazon
I want to draw some very similar comparisons I see as a potential argument for not the similarities of ETH to Amazon post dot com bust but also to the argument for a much longer cycle and a major macro trend developing.
AMZN
ETH
First looking at the similarities in ETH and Amazon.
From inception of the contract you can see they have respected their log trend lines on three occasions with the last and final bear trap in 2008 giving way to a nearly V reversal.
Also note that the 2008 top fell just under the 2001 top just like we saw with the ETH top in 2024.
Now here’s what it looks like if you overlay AMZN price on ETH since 2001 to the 2008 low
What you get is very similar time and price action. Now the difference is time right. Amazon did this in 7 years while ETH is completing the pattern in 5.
My view is that it is because crypto is simply moving faster. Not only is it getting adopted faster than the internet but its trading seven days a week where as AMZN only traded 5 days a week.
If you squeeze the time made up on weekends for crypto you get:
365 x 5 = 1825 trading days in 5 years
on the other hand equities only get:
5 x 52 = 260 days a year
260 x 8 = 2080 trading days in 8 years. Not to mention we didn’t even subtract holidays.
So crypto squeezes in over 110 more trading days a year than stocks do.
This may be a ridiculous idea, who knows but it’s my justification for why we have seen such a quick echo bubble in crypto that aligns so well with the 8 year pattern we saw in the dot com echo bubble. With a faster rate of adoption and 24/7 market it makes sense to me.
Here’s how AMZN has performed since that 2008 echo bubble low. A near 20 year bull market and long term macro trend emerged. Which is the same thing we saw with Gold after 2001, a very long term uptrend began.
SOL vs AAPL
Here we get a similar picture. And funny enough because people had been touting SOL as the AAPL of crypto. None the less this is the comparison of AAPL from 2001 to 2008 over the SOL chart.
Not perfect, but I’d say its somewhat similar. Maybe I’m stretching a bit with this analysis but I’m really just trying to make sense of what has been a brutal cycle and provide some insights on how I see it shaping up based on past bubbles, cycles, and innovations.
Conclusion
This isn’t a prediction—it’s a framework to understand where we are.
It’s clear by now that we have seen the echo bubble but I remain optimistic that we are in fast tracked timing and closer to a low and longer term sustained growth than we are towards any kind of multi year bear market.
Prices are oversold nearly to bear market levels in many cases and small caps never had a bull market anything like 2021 mostly due to people that got rinsed so badly they won’t return. It happens in stocks and it happened in crypto.
If the likes of ETH SOL and XRP continue to survive and gain network share it’s likely we will be looking at the AMZN, AAPL, and NVDIA type plays of tomorrow.
I know thats a long time horizon for what we do here but I am still optimistic that the long term uptrend will resume sooner rather than later for this market.
Just consider the V reversal after the 2008 crash for AMZN. I see a lot of similarities in its fractal over ETH.
Similarly with SOL and AAPL. The 2008 low was really the launching point for the great tech bull market we are still in today.
As for BTC I think this thought process is relevant because of the way it has positioned itself as digital gold.
If that is the case which it’s looking more and more like it, I doubt it will ever reach a true useable status as nothing that is considered a store of value is frequently changing hands.
That’s the very essence of what makes things valuable, you get them you want to keep them. The best real estate, gold, collectors items etc are not something that people use in everyday transactions or ever let go of easily.
Therefore, there is no argument in my view of the BTC vs Alts debate. Alts will continue to have cycles and prove to be very lucrative when they do. BTC will always be there over the long term and be considered a safe haven store of value.
We have a long way to recover but I believe the outlook is becoming more optimistic for a potential multi decade macro bull trend emerging from this mess. At this stage we are appearing to be closer to the beginning of a new cycle rather than the end.