Bulls and Bears

As we navigate what feels like the early stages of a new crypto bull market, let’s take a moment to reflect on past cycles and explore strategies to help preserve gains in your crypto portfolio. This is not financial advice—just a presentation of historical patterns and insights for newcomers and seasoned investors alike.

Crypto investments have the potential to generate life-changing wealth, but they can also experience significant downturns. These aren’t just the typical 20–30% corrections seen in bull markets. We’re talking about prolonged bear markets driven by shifts in global liquidity that impact not just crypto, but also housing, stocks, and other markets. So, how can you protect your portfolio?

Historical Bear Market Drops

Bitcoin (BTC)

• 2011–2012: ~93% drop (from ~$32 to ~$2)
• 2013–2015: ~86% drop (from ~$1,177 to ~$163)
• 2017–2018: ~84% drop (from ~$19,800 to ~$3,200)
• 2021–2022: ~77% drop (from ~$69,000 to ~$15,500)

Ethereum (ETH)

• 2018: ~95% drop (from ~$1,400 to ~$80)
• 2022: ~82% drop (from ~$4,800 to ~$880)

Altcoins

• Typically experience 90%+ drawdowns, with smaller, low-cap coins often dropping 95–99%—some becoming illiquid or abandoned.

Market Trends:

• Bitcoin: 75–85% drop from its all-time high (ATH) before recovery.
• Ethereum: 80–95% decline.
• Altcoins: 90%+ losses are common.

Yes, these figures may seem discouraging—but they serve as a wake-up call. Success in crypto requires more than speculative bets. It demands a deeper understanding of macroeconomic forces influencing liquidity cycles. We encourage you to explore educational resources, such as Ainslie’s YouTube channel and our monthly macroeconomic breakdown with Economist Chris Tipper.

With the right knowledge, you can identify opportunities to secure your gains. Ainslie’s timeless Physical Gold and Silver or new generation Gold (AUS) and Silver (AGS) Standard Tokens can help you achieve this. These tokens are backed 1:1 by physical precious metals, with each token representing one gram of gold or silver. They can also be redeemed for physical metal when needed.

Using our simple “Crypto Swap” function, you can rotate your crypto holdings into these stable assets. This can help preserve the value of gains from Bitcoin, Ethereum, XRP, and other cryptocurrencies during market downturns.

• Gold has consistently demonstrated long-term growth, with an average annual return of 7–8% over the past 50 years. Here’s a decade-by-decade snapshot:
• 1970s: ~35% (collapse of Bretton Woods, high inflation)
• 1980s: ~-2% (correction after 1980 peak)
• 1990s: ~-3% (strong stock market, low inflation)
• 2000s: ~14% (dot-com bubble burst, 9/11, financial crisis)
• 2010s: ~4% (post-2011 recovery, Fed tightening)
• 2020s (so far): ~6–7% (pandemic, inflation concerns)

Overall CAGR (1973–2023): ~7.5%

Let’s consider a conservative, hypothetical scenario based on past trends. Suppose Bitcoin reaches $130,000 during the next bull cycle. If you rotate your gains into AUS Gold tokens at this point, and gold grows at its historical average of 7.5% annually during a potential two-year crypto bear market, your holdings could increase to around $150,000.

Now, imagine the opportunity when crypto prices fall 80–90%. You could potentially reinvest at significantly lower prices, acquiring three to five times the amount of crypto you previously held—positioning yourself for the next bull market.

Baron Nathan Rothschild: "The time to buy is when there's blood in the streets, even if it's your own."

Warren Buffett: "Be fearful when others are greedy, and be greedy when others are fearful."

Understanding liquidity cycles can help you apply these principles to the crypto market, potentially unlocking substantial opportunities during downturns.

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At Ainslie, we’re passionate about helping our customers succeed. Follow us on social media, watch our YouTube content, and attend our webinars and community events. Invest in your education and equip yourself with the knowledge to navigate market cycles confidently. The future is bright. The opportunities are there. The question is—will you be ready to seize them?