Divine Investing

Post 1/2

Despite very few updates from our side we are still active. The reason for the lack of new posts is that we are just sticking to our thesis that we have formed prior to the start of the bull market. Our conviction has been that there will be an alt coin season, which may or may not be true, only time will tell. However, we do believe that the time is at least somewhat running out. In our view we are in the last leg of the bull cycle and it will be a determining factor of how we will look back on this bull market.

There are multiple possible outcomes in our view. Either we get an alt coin season as we are expecting, similar to previous bull runs or there will be a huge disappointment in terms of how this bull run played out. Basically, if you are not one of the few people who have had a large majority of their holdings in a few coins such as $BTC, $XRP, $SOL, $BNB, $SUI, etc., then there is a good chance that you are either very far from your all time high in this bull run or even in the red, depending on when you have purchased your coins.

With this being said, we do realize that our holdings have been underperforming, because our thesis – at least so far – has been incorrect. The problem is that there are so many new token launches and meme coins that spread the liquidity between them, then there’s always “shiny new coins” that the liquidity goes to and the older projects or even projects that are actually building real products get left behind and forgotten. The latest offenders are $TRUMP and $MELANIA, which we see as a net negative for crypto markets in general, because they are just draining retail liquidity to the hands of the few and that liquidity most likely never returns to the market. 

Post 2/2

We will need huge amounts of liquidity for the alt season to properly start, multiples compared to previous bull runs, and even then it will be important where this liquidity flows. The problem in the end are the investors themselves, because they are impatient and want 100x or even 1000x returns over night instead of trying to grow their portfolios incrementally and that's why at least so far the liquidity has not flowed into major alt coins.

If anyone tells you at this point that they know where the market will go they are either lying on purpose or are overconfident in their truth. We can just try to predict, we cannot know, but in our view we have a few months left for the alt season to play out, before the period of low summer liquidity kicks in. If there will be an alt season we think it either happens in Q1/start of Q2 or towards the end of the year in late Q3/Q4. A lot depends on Jerome Powell’s speeches (one is happening tomorrow) and how traditional markets will react, we do not see a scenario where traditional markets go down and crypto markets go up.

There has been a lot of different talks, from pro-crypto administration in the US to the Strategic Bitcoin Reserve, ETF for $ETH staking and so on. The big picture has been the same when we zoom out, the global liquidity is still increasing and will continue to at least for the next few months, after that it is a bit more blurry, because the FED has already started reducing their balance sheet, but liquidity is coming from other sources.

As stated multiple times, we still believe in alt season, that is why we have not rebalanced our portfolio a lot, we still believe in $INJ the most, but only time will tell where we will end up. We will be switching $RUNE to $LDO, because Thorchain’s future is somewhat unclear at this moment and if $ETH staking ETF will happen then $LDO should perform well in theory.

We are keeping track on what is going on in the market on a daily basis, but as stated in the posts from the past, until our thesis changes we will not be making any major changes to the portfolio and are staying hopeful for the potential alt season.

Post 1/3

We have not posted in a while, because as described in a post from the 13th of June we are still consolidating as far as $BTC goes. Back then we said that we are consolidating between $60k and $70k and funnily enough, we are still in this range. We have dipped below $60k for a while, but had quite a strong bounce back. The lack of posts is also due to this fact, honestly not much has fundamentally changed on the crypto market in the last 6 months and also activity in various groups that we are a part of and also on Twitter is quite low at the moment, but this things can change quite quickly in crypto.

There are multiple possible explanations as to why Bitcoin has dropped below $60k, one of them was the selling pressure from the country of Germany, which had over $3 billion worth of Bitcoin that was sold on the open market instead of OTC. The next reason could have been the distribution of the Bitcoins from the Mt. Gox exchange that went under in 2014 because of a hack. Most of the people that wanted to sell these Bitcoins have most likely sold them by now. Then there is one more reason - the uncertainty regarding the war in the Middle East. Generally, when there are major news regarding the region the price action becomes very volatile and we can see huge intraday swings. Having all of these in mind and especially the global liquidity (which we write about later on) we think that Bitcoin has had a good bounce back and showed its strength, all we need is a decisive break through the current all time high.

Post 2/3

After a long while we have decided to do a small rebalance, there is an unlock coming at the end of October for $TIA, which will double its market cap. There could be a short squeeze because of this fact, which might mean that the price will increase in the short-term, but due to the uncertainty we are removing it at least for the time being. It is up 15% today, that is why we feel it is a good time to replace it with $PENDLE, which carries $ETH, DeFi and RWA narratives, which also diversifies our portfolio further.

As far as the macro goes the current conditions seem quite favorable to us, which we can also observe in S&P 500 making new all time highs pretty much on a daily basis. There are several factors to consider. First one being is that the FED has had a 50 bps rate cut in September, signaling to the market that they believe they have tamed the inflation and they are planning further cuts in the coming months. The unemployment in the US is also at an acceptable level. There was much talk of a recession in the past few months, but almost none of the indicators are flashing any signs of recession at this time, it is more the media's way of getting clicks with fearmongering, because bad news generally attract more clicks/views/engagement.

Post 3/3

The second thing we should talk about is the global liquidity, which looks to be on the increase already. The leading country in this aspect is China, the Public Bank of China has announced huge aid to the stock market in the form of 500 billion RMB, with a possibility of 500 more, to which the market has responded very favorably.

The third thing are the elections in the US, this is in our eyes the primary reason as to why the crypto market has not moved to new all time high as SPX did. There is uncertainty regarding who will get elected, our current view is that if Trump wins it is good for crypto in general and if Harris wins it would be good for $BTC, but not so much for alts, what will actually happen remains to be seen. SEC has had a very aggressive and negative approach towards alts in the past couple of years, which is expected to change if Trump wins. Generally the election year is very positive for the markets and YTD the stock market has performed the best out of any year in the 21st century, unfortunately for us crypto has not been doing so hot so far.

We could say this is the longest consolidation (which is quite painful to go through in the bull market) we have ever had in a crypto bull market, normally they are much shorter at least as far as $BTC goes, the alts normally underperform in these periods. Our thesis still remains the same, we are still expecting a "blow-off" top, probably some time in the next year and our expectations are that the altcoins will outperform Bitcoin, that is why our portfolio is positioned in the way it is, we still primarily believe in $INJ, one of the examples why is because it has had higher revenue in Q3 than giants such as $BNB chain and $AVAX.

As long as we stay in this consolidation do not expect many updates from us, but we are constantly monitoring the market as you can see from this long post and we are ready to be more active as things start moving faster once again.