Some old biddy gave the best explanation of bull market dynamics I've come across. I'm not as confident of a 2023 date as her though.
"Whales (professional traders) act as market makers on "self-regulated" crypto exchanges, and pay no fees to these exchanges and do not want to trade against each other (which is why such trades are called "toxic flow").
These market makers run ultra-HF algos that can perform trades (like "layering" and "spoofing") that are illegal on ordinary exchanges.
In 2023 the algos will be configured to manage a bitcoin bull run. Why?
Well, how else will they draw retail traders like you and me (who are now very scared) back to trading crypto?
Both market makers and exchanges need retail investors to come back. Exchanges need their fee income (market makers pay no fees), and for market makers it is because when their algos are equally good (i.e. not Alameda's) they have only a 50-50 change of winning a trade.
But retail investors who take risky, leveraged positions are very likely to be wiped out
Yes, the regulators dropped the ball on this one and allowed crooks in wall St to say fuck it let's start offshore exchanges and offer contracts 125 to 1 leverage.
We saw it with FTX selling btc It didn't have and even at 99% house odds the idiots still managed to blow themselves up.
Where onshore exchanges were offering 2.5 to 1 odds, just goes to show you how far out of wack things were.
The real question is when do we see a short squeeze in btc at which point it makes no sense for retail to not let go of any btc? 5, 10 even 20 years from now?
2018 there was something like 3.6 million btc on the exchanges. 2022 I believe that value is now 2.1 million? With the halving approaching next year 900btc mined a day becomes 450.
There is definitely money waiting on the sidelines for regulatory clarity, maybe we don't see that clarity until 2025.
As for the plumber, that guy will be back degening into the next animal coin to try make 100x. As long as greed and fear remain in the human psyche then the market will be rife with gamblers.