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      Why to still believe in crypto

      Bernstein highlights 5 arguments on why one still should believe in crypto despite the current bear cycle and FTX-like catastrophes that have weighed on investor confidence.

      1. With maturing internet adoption, crypto still has decades of application-led growth. Crypto only touches 5% of total internet users

      2. Crypto's survival instinct is that every crypto winter (in 2014 and 2018 before) is as brutal, but the industry has always come back

      3. Ethereum & its ecosystem represents this application-led growth. Gautam believes that value within crypto will migrate from the speculative crypto assets to more utility and application-driven ecosystems such as Ethereum and its related Layer-2 platforms

      4. FTX contagion effects are isolated to select players with FTX only 10% of the global trading volumes, and have strengthened the blockchain financial economy

      5. Regulation is coming but adds legitimacy to the space for institutions to participate and will be a net positive in the long run in our view. 

      Why to still believe in crypto
      Source: Bernstein
      Size buying

      Garrett continues: "if everyone is so bearish, who is buying?"

      (un)natural answer = systematic community who have purchased ~100bn of global equities in the last 10 days.

      Size buying
      Source: GS
      You are consensus

      Goldman's derivatives guru Garrett: "if you’re bearish, you’re consensus … doesn’t mean you are wrong, but you are in the majority". On AAII sentiment he writes: "...investors have *never* been this consistently bearish… for 11 straight weeks, >50% or respondents have been negative on the market"

      You are consensus
      Source: GS