I always write these to make it simple for you to get the gist of the article.
This article highlights my thesis: That (without gambling on luck), sustainable returns in crypto (that beat the market) are earned by answering one question: where are we in the speculation cycle?
We do that by analyzing:
Macro Liquidity — How much fuel exists
Cycle Rotation — How people are using the fuel
Speculation Intensity — How aggressively people are lighting the fuel
Furthermore, these articles will also explore:
What parts of crypto are currently misunderstood or undervalued?
What’s a good risk framework for not losing our head (or our money) in crypto?
Let’s Dig In
Everyone wants to know what crypto will do next.
The problem is that often, we ask the wrong question.
Markets are not driven by what we think will happen. They’re driven by two things:
Human choice about whether they want to buy or sell
How much available capital they actually have.
To expand:
Humans decide to buy or sell based on that they thinkeveryone else is going to do.
This is what makes markets move
Available capital determines whether they have enough fuel to carry out their intent.
Prices go up = people have money (available capital) + they want to buy (risk appetite)
How We Make Money in Markets
To make money, we have to:
Understand how much money everyone has
Understand whether they want to buy or sell (and what they want to buy or sell).
Manage our portfolio wisely, understanding, we won’t always be right
That’s what we’re trying to do here.
Now, we’ll dive later into the available money aspect to this.
For now, I want to focus on how we know what others will do?
Ultimately, we, as keen thinking creatures want to take this a step forward.
We want to ask: what do others think others will do?
Because that’s how they make their decision.
By understanding how speculators behave — what they are speculating on, and how they behave when they speculate, we can
Speculate ourselves!
And make money.
I call it Speculating on Speculation.
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John Maynard Keynes described it like this:
Markets are like a newspaper beauty contest where participants are not choosing the face they find most beautiful (move over Sydney Sweeney).
Instead they choose the face they think everyone else will choose.
So the framework we’re building is simply an attempt to answer:
Which face will everyone else choose?
God help us.
What We Are Going To Do
In this series we will:
Cement a framework for understanding what drives crypto market cycles
Consistently evaluate our indicators to manage capital intelligently
Identify which assets are worthy of our capital…and when
The goal is not prediction.
The goal is probabilistic positioning.
In other words, being extremely intentional with our trades and investments so we can both:
Learn from and refine our assumptions
Make money
How I Write
As always with my writing, I want to share both my conclusions and the thought frameworks behind them. I do this for two reasons:
I am not God and can certainly make mistakes.
I want you to understand how I’m thinking so you can form your own conclusions.
You are, of course, welcome to jump straight to the more conclusive articles and skip the framework pieces.
But damn do I love a good interlude. Like meta talking about the speech before I actually give it. Except for that one open-mic night when I just went up there and sat for 5 minutes in silence…no interlude.
Ok back to the topic:
Crypto media often spews endless noise just to keep people clicking.
That’s not what this is (after he spews a bunch of noise).
My goal is not to send you a million articles that just compound your already infinite to-do list.
My goal is to send you clear, digestible thinking that helps you become more financially and crypto literate.
And I always want to tie it back to one question: what should I do with this info?
A Brief Rant
My goal with these articles is to provide a framework of understanding on par with the kinds of trading “courses” people charge $10k+ for.
Why?
First, because honestly — f*ck those people charging that much for information you can get for a $1.50 in late fees at the public library.
This isn’t rocket science.
Second, if you’re supposedly so successful trading, why the hell do you need to sell it on Instagram?
Third, because I genuinely believe this kind of thinking should be publicly accessible.
That’s part of the promise of crypto. It unlocks tools and financial infrastructure that used to live behind the TradFi paywall.
If we’re going to use their tools, let’s learn how they think.
And hopefully, we make some money along the way.
Yes — at some point I may charge for parts of this Substack.
But it won’t be $10k.
Not even close.
Disclaimer
This is not investment advice.
I do put my money where my mouth is, but crypto is still a highly speculative asset class.
I believe in the long-term potential of crypto as a concept — and Bitcoin and Ethereum in practice.
I know more about crypto than any other asset class, so it’s where my informational advantage is.
A Word On Reflexivity
Before we go further, we need to understand something important.
Markets are reflexive.
The concept comes from George Soros.
Basically, price does not just reflect reality.
Price changes reality.
Because, what makes something go up in price is whether people change their minds, and decide to buy.
Except, it doesn’t go on forever
Why not?
Because, even if everyone knows markets are reflexive…the reflexivity doesn’t disappear.
Even if the market goes up which spurs optimism (and so on), doesn’t mean prices will go up forever.
Why?
Because eventually the money runs out.
And, eventually, people’s desire to buy wanes, because of risk adveristy, and they cash out.
And then everybody who thought they were so smart, gets scared.
Then, reflexivity moves the other way.
My Personal Rule
Our goal, ultimately, is not to trade emotionally.
I actually like to trade opposite to my emotions. Because to beat the market, we must do what others aren’t. And the masses are pretty predictably trading according to their emotions. So…
When I’m afraid, I do the opposite of what that fear is saying.
More on that later.
An Honest Disclaimer
I am just a person. I have not made a ton of money executing this strategy (yet). I have had success in crypto, but largely from being early. A bit on my backstory here.
However, I think the idea that there are some people more capable and more intelligent who are able to do this, is false.
These frameworks are not “special” and they don’t require “special people.” They require logic, discipline, and emotional regulation.
Trade at your own risk. I cannot promise anything other than being as intellectually honest as I possibly can be.
Are people actually buying? How is capital moving within crypto itself?
Which sectors move first? Which assets follow?
In simple terms:
Which crypto go up?
3. Mispricing & Convex Infrastructure
What parts of crypto are currently misunderstood or undervalued?
Where will the money flow when the markets rotate?
In simple terms:
Which crypto go up faster?
Future articles:
Which alts should we target?
What other strategies can we deploy to capitlize on the current cycle environment (i.e. pair trading)
4. Risk Architecture
How should capital actually be deployed?
How do we manage risk and aim for sustainable growth rather than get tossed around by the waves.
In simple terms:
Make sure we can still eat while we wait for gainz.
Let’s Begin
In the next articles we’ll unpack this:
Macro Liquidity — How much fuel exists
Cycle Rotation — Where the fuel is going
Speculation Intensity — How aggressively people are lighting the fuel
And if we do it thoroughly and honestly, perhaps we can answer:
Where are we in the crypto cycle right now?
And then position accordingly…
Huzzah.
If you enjoyed this article: Subscribe for future pieces of my Speculating on Speculation work.
As always, do your own research and, remember, money doesn’t make us happy. In the end, we all box up that game of monopoly and realize, it was a great ride, but it didn’t really matter who owned Boardwalk Ave.
