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One of uh the biggest surprises has been the proliferation of stable coins. Now, we started seeing stable coins gain traction in 23 and 24, but it just took off this year. And as I've said, stable coins are usurping one of the roles we expected Bitcoin to play. But on the other hand, uh digital gold, Bitcoin, uh had uh a lot of company from gold this year in terms of showing us the way.
Gold uh has more than doubled over the past year. So, Bitcoin's role as digital gold should also be uh much more valuable. One of the most important trends Kathy Wood points to is the rapid rise of stable coins. While Bitcoin was originally framed as a digital medium of exchange, Wood explains that stable coins have increasingly stepped into that role.
Today, they serve as the transactional backbone of the digital asset ecosystem, offering fast, lowcost settlements, efficient crossber payments, and deep onchain liquidity without the price volatility associated with Bitcoin. Although this shift wasn't entirely unexpected, the speed and scale of adoption have been remarkable.
That said, Wood emphasizes that this evolution doesn't reduce Bitcoin's significance. It actually helps define its true role within the broader crypto landscape. If you find this breakdown valuable, be sure to like the video, subscribe to the channel, and turn on notifications so you don't miss future content.
You can also explore our other videos covering cryptocurrencies and the wider digital asset market. And let us know your thoughts in the comments below. Your engagement goes a long way in supporting the channel. Thanks for watching and enjoy the video. One of uh the biggest surprises has been the proliferation of stable coins.
Now, we started seeing stable coins gain traction in 23 and 24, but it just took off this year. And as I've said, stable coins are usurping one of the roles we expected Bitcoin to play. But on the other hand, uh digital gold, Bitcoin, uh had uh a lot of company from gold this year in terms of showing us the way.
Gold uh has more than doubled over the past year. So, Bitcoin's role as digital gold should also be uh much more valuable. So my guess is that we're going to have more or less a continuation of the same until monetary policy sufficiently changes. That is my guess as to how this is ultimately going to play out.
You know, could there be a rally back up to the 50we moving average in 2026? I told you guys back in October when the bare market started not to expect a counter trend rally until 2026. Back in 2022, we had the counter trend rally to the 50week moving average in March. And in 2018, the counter trend rally to the 50week moving average did not occur until July.
So, the reason I said not to expect it for the last month or so is just kind of looking back at history and saying, look, historically, it takes until the midterm year to get that counter trend rally. There is no such thing as a guarantee, though. In 2014, we never actually quite made it back up to the 50we SMA until the bare market was actually over.
So don't look at that as a sure thing. The other thing is that there is still the potential here of sweeping this low here. It seems to me like it's likely going to come into play at some point in 2026. I I couldn't tell you exactly when, but I think that will be an important level. The other important level is the yearly open.
So, Bitcoin, you know, where it opened the year right around these prices, I think that's going to be an important pivot level for a while. And the reason I say that is if you look at where Bitcoin opened in 2022, it essentially opened at around um, you know, between 40 and 50K right here. And then Bitcoin dumped when the year started and then it rallied back up to that level that it was at when it opened the year.
Right? So the yearly open ended up being resistance in the midterm year at the 50week moving average. The other thing in 2018, in 2017, sorry, in the 2018 yearly open, Bitcoin opened the year um I I believe at around like 14K give or take and then that level ended up being resistance in the 2019 rally.
So the yearly open where we are right now, I have a feeling will come into play in the future, right? is going to act as some important level that's going to be respected for a while in this coming market cycle. That is my best guess. If you look at the current year-to- date ROI of Bitcoin in 2026 and if you compare it to say I mean we haven't had a day yet, right?
But if you look at 2022 and 2018 and 2014 and you average out all the prior midterm years, you know, it it would suggest we could see further downside. But I will remind you that I don't know if it's as simple as this. And I'm not trying to say this time is different. I I I do think Bitcoin has been in a bare market.
But what I'm saying is that because we topped on apathy rather than euphoria, right? Again, if you look at the social interest, we topped on apathy this cycle. That's why there was no rotation into altcoins rather than euphoria like 2017 and 2021 where there was a rotation into altcoins. Because we topped on apathy, the decline has been a lot more muted.
And so I continue to say, hey, while it might make sense to compare to 2014, 2018, and 2022, we need to be open-minded and say, what if it's more like the 2019 bare market? That is my base case right now, that we're in something like that. And so currently I'm deferring to this chart as sort of the the the thing that provides the best example of what like what what might come in the months ahead.
You'll likely have some rallies back up. I'm not yet sure that they'll have enough momentum to be sustained. as we get further out, um perhaps we can muster up a stronger rally. But I just want people to know that like this one, I know it's not perfect and analogs are a dime a dozen, but this one, we've been talking about it since this whole bare market began and it's tracking the closest out of all the other bare markets, right?
It tracks the closest. And so if it's not broke, don't fix it. We'll see if this continues to play out. My base case is that it will. So, happy new year to everyone. Midterm years historically have ended up being great times to buy, especially sort of mid to late year if history is any indication. So, in order to make money in the bull markets, the people that made the most money in these bull markets were the people that stuck around in the bear and got those good opportunities.
So my encouragement to you would be stick around in the midterm year, look for opportunities, and hopefully you can reap the rewards as we get out into the next market cycle. Another key point in Wood's analysis is the continued underperformance of altcoins compared to Bitcoin. For several years in a row, altcoins have steadily lost ground against Bitcoin, highlighting a difficult reality for crypto investors.
Added complexity doesn't automatically translate into better returns. Bitcoin continues to stand as the benchmark, the foundational monetary layer of the crypto ecosystem. While innovation across the space remains active, the data shows that holding Bitcoin has proven to be a far more effective long-term approach than attempting to time speculative rotations.
This aligns with Wood's broader investment mindset. Focus on the platforms, not the noise. Importantly, wood isn't bearish. Historically, periods marked by widespread skepticism have often presented some of the strongest long-term entry opportunities. Midcycle phases when sentiment is weak, narratives fall apart, and price action lacks excitement have consistently created asymmetric opportunities for disciplined investors.
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