Bitcoin Has A 'Free Walk To ATHs:' Investment Expert Goes Viral With 'Financial Nihilism' Thesis

What will fuel the next cryptocurrency rally? According to Travis Kling, it's "financial nihilism."

The chief investment officer of Ikigai Asset Management recently went viral on X (formerly Twitter) with a thread called "A Lack of Pretense That Any of This S--t Does Anything or Will Ever Do Anything." Throughout, Kling makes the case that investors stopped caring about the lack of use cases in crypto.

The commentary collected over 400,000 views.

"BTC Has Essentially A Free Walk To ATHs"

Kling does not give a price target for a new Bitcoin BTC/USD all-time high (somewhere between $75,000 and $180,000), nor a timeframe (sometime between now and the first half of 2025). But he sees the stars lining up like never before:

• The Bitcoin halving is a few months out.
• The Fed will likely cut rates a few times in 2024.
• Spot ETFs "unlock safe access to BTC for trillions of dollars."

His takeaway: "Crypto will have to do very little 'work' to get BTC into the high $60s."

...As Does Ethereum

Kling says the same is true for Ethereum ETH/USD, "just delayed by 3-12 months." The SEC will be forced to approve a spot Ethereum ETF for the same reasons it had to approve spot Bitcoin ETFs. 

Kling thinks it's "quite unlikely" there will be no spot Ethereum ETF a year from now - August "feels about right" for an approval.

The key to his core thesis: "We’ve never had a setup like that before."

Enter Financial Nihilism: "Why Not Put $500 Into A Memecoin That Could 50x?"

Kling says the quiet part of many a market participant's approach out loud: "Up 55% and up 100%? What is this, a pump for ants???"

With all-time highs for the biggest assets taken for granted, investors look for even riskier, lower-market-cap-assets to get a chance at upward mobility. "Median home prices divided by median income is at a completely untenable level," he says.

The result is the mindset that "it’s not like the $500 is enough to make any difference anyways."

"This is the zeitgeist for young Americans," according to Kling, and it is not difficult to see his point:

Anticipating memes and narratives is a key skill in crypto, say industry insiders.

Marketing stunts try to expose memecoins to a mainstream audience.

Meme stocks - like GameStop - are replaced by memecoins - like GameStop.

This zeitgeist is "a huge driver of shitcoining," says Kling. He points to revenue in the online gambling industry to back up his thesis:

 

4. If you’re looking for further proof of my point about financial nihilism, look no further than gambling trends. They are staggering. pic.twitter.com/kYw8Eq3HgO

— Travis Kling (@Travis_Kling) February 2, 2024

 

Americans Don't Trust Crypto, But: "Let’s Go S--tcoining"

Kling cites a survey that shows 75% of all American adults who have heard of cryptocurrency aren’t confident in their safety and reliability. And roughly four-in-ten adults who are aware of crypto, about 39%, say they are not at all confident.

But that does not stop them from dabbling in the market: "Don’t trust it, but prices are heading higher," is their motto, Kling says.

The decline of Bitcoin dominance, Bitcoin's share of total cryptocurrency market capitalization, is evidence of that, according to Kling. Its 52% in 2023 were 19% lower than the 71% coming out of the last bear market in 2019. The difference went to "complete vaporware" and memecoins like Bonk BONK/USD. 

This "lack of pretense" has two effects:

1. Relative valuation is king: market participants buy ETH because it is cheap relative to BTC, Solana SOL/USD because it is cheap relative to ETH and so on.
2. Altcoins with airdrops are also king: examples like the $JUP airdrop where people print literal millions means investors and protocols both chase airdrops for their own reasons.

With the SEC likely to lose its court case against Coinbase, according to Kling, it means "bring on the s--tcoining."

Could This Thesis Be Wrong? Here's How:

Kling sees three ways how his own thesis could be wrong:

1. A Fed pivot: an unexpected inflation spike or any other reasons prompting the Fed to not ease rates would be particularly bad for "vaporware ponzi crypto."
2. Binance goes "quite badly:" since Binance is "ground zero for vaporware ripping," stronger regulatory enforcement on altcoin trading would be "seriously detrimental to the market caps of vaporware ponzis."
3. The Democratic Party wins the Presidential Election: While this wouldn't be a problem in 2024, a win "across the board" could spell "two more choppy years from US regulators."

Conclusion: "High Prices, Low Expectations"

The thread ends on the note that altcoin prices will surge in the next 12 to 18 months without even the expectation of real-world use cases driving the trend. A "crazy setup," but not that crazy in grand scheme of cryptocurrency things.

Now Read: US Stocks Brace For Another Day In The Red As Rally Loses Steam

Image: Pixabay, Edited with Canva