The AI Scare and Bitcoin Are the Same Trade

CRYPTO CRASHES.

LIQUIDATIONS.

That's probably what your inbox looks like this morning if you follow crypto.

Let me add some perspective.

This month I've been buying Bitcoin for the first time in a while. Price is revisiting its prior cycle highs from 2021, and what acted as resistance for so long could potentially turn into a strong shelf of support.

My financial media of choice, Twitter, is now parading around how the world is going to end because AI has started eating software, and it's foreshadowing what it's going to do to the economy.

Psychologically, humans are equipped with an incredibly strong negativity bias. We experience negative emotion far more intensely than positive emotion, and when new developments come our way, we're more likely to see the threat than the opportunity.

It's only human nature that everyone is losing their shit over AI.

But I think we'll look back at this moment in the coming years as one of the best buying opportunities in software, even though it feels scary to buy companies where the narrative is that their moats are now permanently disrupted.

And if this software and AI scare is a big fade, so is this recent selloff in Bitcoin.

The two trade exactly the same.

Yes, Bitcoin is down this morning.

Big surprise, it's in a downtrend.

But when I zoom out, I like the risk vs. reward down here.

If Bitcoin loses these prior cycle highs, I get proven wrong very quickly.

But the upside?

All-time highs and well beyond.

I like that bet.

Here's to a productive week.

Cheers,

Louis Sykes
Senior Crypto Analyst, All Star Charts