The cryptocurrency market is abuzz with talk of a Bitcoin “supercycle,” a prolonged bull run that defies traditional boom-and-bust patterns. However, Chris Burniske, a highly respected figure in the crypto space and partner at Placeholder VC, is pouring cold water on this optimistic notion, calling it a “collective delusion.”
In a recent, insightful thread on X (formerly Twitter), Burniske dissected the prevailing sentiment, drawing on his extensive experience navigating over a decade of crypto market cycles. He acknowledged the potential impact of new factors such as Bitcoin exchange-traded funds (ETFs) and the possibility of sovereign adoption of Bitcoin. While conceding these developments might lessen the severity of future bear markets, he firmly asserted that the idea of a perpetual bull run—a “supercycle”—is fundamentally flawed.
Burniske points to the current bull market, which he places its start around November 2022. This rally has seen Bitcoin surge to near $100,000, representing a staggering sixfold increase from the previous cycle’s low. Other significant cryptocurrencies like Ethereum and Solana have also experienced explosive growth, with gains exceeding 4x and 30x respectively during the same period. This remarkable growth, however, is precisely what concerns Burniske.
He cautions investors against entering the market late in a bull run, emphasizing a crucial truth: increased market attention often correlates with poor entry timing for new buyers. As crypto prices climb, they attract more attention, leading to increased buying pressure, but often at a price point that will prove less lucrative in the long run. Burniske contrasts this with the ideal entry point—when few are paying attention, a scenario he recalls as being the case approximately two years prior.
Burniske also challenges the belief that structural changes, such as institutional involvement or governmental adoption, will eliminate the inherent volatility of cryptocurrency. He argues that any asset experiencing such rapid, exponential growth (100x) is inherently prone to substantial corrections—potentially 80-90% crashes—due to the sheer number of investors holding significant profits. While acknowledging the potential mitigating effect of ETFs on future bear markets, he maintains that market corrections are an intrinsic part of the crypto lifecycle. Dismissing recent discussions of shortened cycles as “bear market PTSD,” Burniske underscores the importance of realistic expectations.
For newcomers to the crypto space, Burniske suggests a simple, yet effective portfolio strategy: a balanced allocation to established assets like Bitcoin (50%), Ethereum (25%), and Solana (25%). He strongly advises against speculative investments in less-established projects without thorough due diligence. Equally crucial is a disciplined approach to profit-taking, advising investors to consider taking half their profits when investments double from their entry price, preserving their initial investment capital.
Burniske concludes with a sobering warning for those anticipating enormous returns from current price levels. While acknowledging the potential for good profits, he cautions against expecting extraordinary, life-changing gains. His message is a stark reminder of the inherent risks and volatility of the cryptocurrency market, urging investors to approach the space with a balanced and informed strategy.
