Based on the news headlines, you’d think that the massive crypto crash of 2022 has spilled over into 2023. 

We’re just about a week into the new year. And already, high-profile crypto lenders have announced big layoffs. Major exchanges have announced huge withdrawals. And key players are getting sued. Typically, layoffs, withdrawals, and lawsuits aren’t part of the recipe for positive price action. 

Yet, cryptos are actually off to a great start in 2023. 

Year-to-date – and it’s only been a week – major cryptos Bitcoin (BTC-USD), Ethereum (ETH-USD), and Cardano (ADA-USD) are all up, paced by a 20% gain in Cardano. 

And smaller cryptos have staged even bigger rallies. Near (NEAR-USD) is up 32% this year. Solana (SOL-USD) is up 65%. XYO (XYO-USD) is up more than 87%. And Lido DAO (LDO-USD) is up 99%!

That’s all in just about a week, folks. 

Said differently, the crypto industry has been hit with lawsuits, layoffs, and withdrawals in 2023. And yet, some cryptos have already doubled this year. 

It’s starting to feel like cryptos want to make a comeback. 

Guess what? They will. 

Here’s the thing about cryptos: Love ‘em or hate ‘em, every few years, they do the same thing. They boom for a few years. Then they bust for a year. Then they boom again. 

Boom. Bust. Boom. It’s part of the crypto cycle. The key to being a great crypto investor is to buy when a bust begins to turn into a boom – that’s when millionaires are made in this industry. 

And the 2022 bust is about to turn into a 2023 boom. 

The Crypto Boom Cycle

I know this because previous crypto busts have all followed the same pattern. That is, during your typical crypto bust, Bitcoin drops about 80% over the course of 50 to 60 weeks. And it tends to bottom about 12 to 16 months before a Bitcoin halving. 

We’re down almost 80% on Bitcoin right now. This drawdown has lasted about 60 weeks. And we’re 15 months away from the Fourth Bitcoin Halving. 

This is what the bottom looks like. 

Down 80%… 60 weeks in… 15 months away from a halving – the script has been written. This is normally when a crypto bust turns into a boom. 

Is this time different?

No – if anything, this time is almost guaranteed to be the same because of the Fed. 

That is, as arguably the ultimate risk asset, Bitcoin has historically tracked U.S. money supply growth. When U.S. money supply growth is rising, there’s more money in the economy to be invested in cryptos, and crypto prices soar. The converse is true, too. See the chart below. M2 supply growth leads Bitcoin almost perfectly. 

M2 money supply growth is cyclical. For the past 50 years, it has cycled between 0% and 25%. Right now, we’re closing in on 0%. History says this is the bottom of the money supply cycle. And throughout 2023/24, money supply growth rates will rise. 

As they do rise, crypto prices should, too – not by a little, but by a lot. 

The Final Word

Long story short, all the stars are aligning for tokens to skyrocket in 2023. 

We’re down about 80%, which is as much as Bitcoin normally falls in a bear market… 

We’re 60 weeks into this crash, which is about as long as Bitcoin normally falls in a bear market… 

And we’re 15 months before a halving, which is consistent with when new crypto boom cycles begin… 

Plus, M2 supply growth is set to rise next year, also historically consistent with rising crypto prices. 

When investing, you always want your thesis to be backed by mountains of data. Well, the 2023 bull thesis on cryptos is backed by a Mt. Everest-size mountain of data. 

I’ll take my chances. 

I think 2023 is going to be a record breakout year for cryptos and, actually, all risk assets. I think tech stocks will soar this year, too, as well as most growth stocks. 

Now is the time to be going risk-on. 

Find out which assets I like best for a potential big market rebound in 2023.

On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.