This is not a bullish or a hopeful post, only the facts.
Recently, crypto folks are focusing on the macro picture. The mood is apathetic; stablecoin holders aren't deploying, just watching and waiting.
● So what now?
The best we can do is look for past parallels, with the COVID crisis still fresh in our memory. It's a useful reference for how things might unfold from here.
Here's my view of the current situation and a rough timeline for how long this downturn could last.
Spoiler: I believe this will be a relatively short crisis. However, the bad news is that predicting market movements in such an environment is nearly impossible. So consider this as one theory—not gospel.
Here’s how I see it playing out, in simple terms
First, it's important to understand that market crises, while negative, often lead to positive outcomes.
A single piece of bad news can be countered by a positive event, and resolving ten negative issues can generate ten new growth drivers for the market.
The entire market decline can be played out by just 2-3 positive news events. Resolving another 7-8 negative factors will create new drives future market growth.
This is why crisis situations have always been the most crucial moments for all markets.
Now back to the current market.
◢ Stage 1: A controlled slowdown
Let’s talk about three levers: tariffs, interest rates, and the money printer.
The logic behind the tariffs is pretty straightforward. Trump brought in aggressive duties across the board — first on China, then on other countries too.
The goal wasn’t just trade leverage — it was to spark a controlled slowdown. By tightening global trade and pressuring the economy, it creates the kind of environment where the Fed has to respond by cutting rates.
And that’s key, because lower rates are necessary to make upcoming U.S. debt refinancing (especially this summer) even remotely manageable.
Basically, you slow things down just enough to justify easier monetary policy.
And just like during Covid, we’ve already seen our version of “Black Monday” — a sharp market sell-off that kicks off the cycle.
◢ Stage 2: The Fed cuts — slowly
Back in March 2020, the Fed was behind the curve. It cut rates by 50bps in early March, then slashed all the way to zero less than two weeks later. That panic pivot saved the markets.
This time, the Fed is again slow-walking the process.
They’ve paused hikes, but real cuts haven’t started yet.
Once the data gets bad enough — unemployment ticking up, inflation stabilizing under 3%—the Fed will likely begin a proper easing cycle.
First cut could come in June or July.
But early cuts won’t move the needle much. Just like in 2020, markets may keep falling even after the first move.
Stage 3: Cheap money + asset pump
Once rates are low enough and liquidity returns (likely via stealth QE or repo support), things start turning.
Markets bounce back. Risk assets — crypto especially — will run hard. Same pattern we saw post-Covid: money floods in, prices rip, inflation starts creeping up again.
That’s when the next bull run kicks off.
◢ Stage 4: Easing tariffs, inflation pressure
At some point, the government has to walk a fine line. Tariffs fuel inflation, and inflation caps how much the Fed can print or cut. If inflation starts climbing again mid-cycle, they’ll have to unwind some of those trade restrictions — or risk killing the recovery.
I don’t think they’ll go full reversal, but selective easing is likely, especially if inflation hits sticky levels above 3.5%.
Conclusion:
So here’s my base case:
• April will stay red.
• May-June will be choppy — rate cuts might begin but won’t have immediate impact.
• From summer into Q4, we’ll start climbing.
• A new bull cycle could last 12–18 months, similar to the 2020–2021 run.
The macro setup isn’t pretty, but the script is familiar. If history rhymes again, we’re in the late stages of the downturn — and early innings of something bigger.
It's important to remember that this is just one theory. Macro and geopolitical factors are currently playing a crucial role in the markets, and everything can essentially change in just one day.
Despite the complexity of the market, I like that crypto is closely correlated with macroeconomic factors. This correlation suggests that crypto assets will soon be assessed more on their fundamentals.
As a result, current projects will have the potential to develop much more robustly, and people will start to rely on fundamental factors rather than just appealing meme imagery.