Cobie discusses market perspectives, UST collapse, summarizes experiences and lessons learned, his view on the bear market: 50% decline still to be realized

Famous analysts Cobie and Chris Burniske, former head of cryptocurrency at Placeholder, shared their current market perspectives on the Unchained Podcast, including market highs and lows, surviving bear markets, the collapse of UST, lessons learned from the past, and catalysts for the next bull market.

The program lasted for an hour and a half, and this article is based on a summary compiled by RMG, an intern at the hedge fund Altana Digital Asset. If there are any doubts, please refer to the Unchained Podcast for more information.

Is it a bear market now?

Two guests, Cobie and Chris Burniske, mentioned the reasons why they believe it is currently a bear market. These include emotional indicators leaning towards fear, most tokens experiencing a -60% drop from their all-time high (ATH), with previous bear markets seeing drops up to -85%, indicating a potential further -50% drop based on current prices.

ETH saw a drop of -95% in 2018, which means ETH dropped 85% from its historical high of $1,419, then another 50%, and further 50% before hitting a low point on Coinbase at $80.6 on 12/14/2018.

They believe this will be the biggest bear market for altcoins, with many altcoins' fully diluted valuation still being too high, likely leading to multiple -99% drops, then another -99% drop after the first -99%.

The issue is not whether UST is under attack

Regardless of whether LUNA/UST is decoupled or not, market price action will still exhibit significant volatility during that period.

Cobie commented that the decoupling of UST would only bring about larger-scale liquidation events, but he was surprised by the relatively minor drop in Bitcoin.

He believes that LUNA must maintain low volatility for UST to function, so the decoupling was also expected. He pointed out that the issue is not whether UST is being maliciously attacked, but rather that the mechanism is too easily attacked and will eventually face attacks, making it an entirely unreliable system.

The impact of macroeconomics on the crypto market

Chris Burniske believes that the ten-year Treasury yield will decline, excessive gains will increase pressure on the U.S. government, and inflation will decrease in the medium to later stages.

He expects crypto and stock markets to bottom out in the second half of the year, but the market will still experience multiple panic sell-offs, policy pressures from the Federal Reserve, large-scale liquidations, etc., and hopes for the realization of Ethereum merge.

He also mentioned Japan's ten-year bubble economy in 1980 as the worst-case scenario he envisions. Other perspectives include:

• The diminishing importance of Bitcoin halving, but the cycle still exists.
• Bitcoin's previous peaks: 12/2013, 12/2017, 12/2021.
• If there is no one discussing cryptocurrencies and Twitter discussions are low, it is close to the bottom.

Cobie stated:

Is the world fairer because of cryptocurrencies? Or are we just busy building Ponzi schemes? Our mission remains, such as tokens from DeFi 1.0, although these tokens are still bad. Perhaps so-called internet currencies are just a fragmented currency policy, with too much liquidity in the ecosystem driven by profits, and all assets are overvalued.

What makes this bull market different?

1. More venture capital institutions entering the crypto space.
2. Higher market value and lower volatility for most projects.
3. Bitcoin and Ethereum playing supporting roles in this bull market.
4. Due to its large market cap, Bitcoin can no longer achieve 20x gains as in previous years.
5. Shift in incentives: Previously focused on Bitcoin, investors now focus on altcoins.

Regarding regulation and venture capital institutions, they also shared some interesting perspectives:

1. Regulation favors institutions over retail investors.
2. ICOs may be fairer, as everyone starts from the same point.
3. Despite the madness of 2017, it was a better year for retail investors.

What innovations will the next bull market bring?

Cobie stated that he will never know. Burniske's views are as follows:

• Entry of Web2 to create Web2 applications supported by blockchain technology.
• BTC will survive and overcome issues such as reduced token incentives due to halving of block rewards.
• NFTs, like ICOs in 2017, will advance in technology and no longer be limited to PFP and speculation.

"Staking" is dead

Cobie reiterated his "death of staking" argument. He mainly discussed how the concept of staking has been abused and confused, no longer being as simple as verifying blocks and receiving rewards, but introducing fancy mechanisms to incentivize users to stake and lock tokens.

Lessons learned

Cobie:

• Poor wallet management.
• Poor risk management.
• A crash is not the end of the world.
• Avoid dwelling on unrealized asset net worth highs.
• Harry Potter Horcrux management: Allocate assets to different places such as self-custody, exchanges, on-chain, etc.

Burniske:

• 2014: Bought too little Bitcoin.
• 2015: Discovered the negative correlation between ETH and BTC, overtraded.
• 2016: Hacked, lost all ETH.
• 2017: Too confident after founding a venture, experienced significant losses the following year.
• 2018: First-tier investment failed.
• 2019: FOMO was too strong.
• 2021: Getting better.