Energy is one of the most critical factors in determining a nation’s sovereignty, economic stability, and geopolitical power. This has been the cornerstone of maintaining American power since the Bretton Woods system was implemented in 1944. It stablized the post-WWII economy by allowing the USD to be fixed to the price of gold at $35/oz.

That changed in 1971 when Bretton Woods collapsed, and the USD became the global reserve currency.

The U.S. then solidified its power through the OPEC system, ensuring that all oil transactions were conducted in USD. This was a power play by the US and more importantly strengthened the network effects of the USD. This was a calculated move to strengthen the dollar’s network effects—essentially making it the financial plumbing of the world. And just like changing the plumbing in your house requires tearing out walls, dismantling this system would take something drastic (ahem, war). This is what the US wanted. They wanted the network effect of the USD to be so strong that it would take something radical to undo (ahem war). Which leads us to today. 

Now that we understand how energy underpins a nation’s power, let’s break down the energy sector itself.

Back in the 1800’s we primarily relied on wood as an energy source, until we smart humans discovered that the coal in the ground could burn (not to mention be produced) more efficiently.  But here’s what most people forget: today, we still burn more wood for energy than we did back then. And now, Germany has gone so far as to say burning wooden pallets is good for the environment. 

As we smart fella’s find new forms of energy, the pattern is clear—every time we discover a new energy source, we don’t abandon the old ones; we just keep using more of everything. My intuition leads me to believe that this trend will likely continue. Coal, oil, and other traditional energy sources aren’t disappearing anytime soon and will be used more and more into the future.  

As population continues to grow, we will see more energy consumption, not to mention that the technology we are now trying to power is putting massive pressure on our energy usage. 

With global population growth and increasing energy demands—especially from AI and data processing—our energy needs are only going up.

So what's the solution?  

Well nuclear energy is really the most efficient way to generate more energy, however, it takes approximately 10 years to get a new nuclear facility up and running. So this doesn't solve our immediate issue.  

Wind, solar, hydro and geothermal ––despite their location-specific limitiations of needing sun, consistent wind, water or some geothermal activity near, the development of all have been heavily subsidized by woke governments through tax breaks. So, that makes me question their economic viability in a free capitalistic world.  

There are two solutions for us: Natural gas and coal. Both have been suppressed for years, and probably hit their bottom when oil went negative during covid. This has been exacerbated and elongated largely due to the green movement pushing to develop ‘green’ energy.  

Natural gas is a pain in the arse to transport––it must be liquified, which can make it more costly than coal. Some places like the U.S. who have the infrastructure, it can be a solution and for that reason I remain bullish on natty gas. But globally, it’s still more challenging than just tossing some of that black nasty stuff onto a ship and sending it overseas. 

Enter: Investment Opportunity...

Energy stocks are the most undervalued they've ever been relative to the S&P 500. Hence my attraction to them. 

Right now, not sure you can go wrong with a basket of coal mining stocks. These companies are highly profitable, carry low debt, and have P/E ratios under 10. And here’s the kicker—a number of them offer +8% dividend yields. They’re printing cash, with minimal to no debt, which means downside risk is low while upside potential is massive as the energy sector rebounds.

We just saw the biggest liquidation in crypto history—bigger than FTX or schmovid. Who would’ve thought?

And this didn’t happen at the bottom of a bear market—it happened while crypto is at all-time highs. Normally, massive liquidations knock the wind out of investors when sentiment is at rock bottom, not when prices are soaring.

From a macro persepctive, on a higher timeframe with a longer-term view, the market is holding up well. That liquidation 

provided a textbook retest of the 2022 high.

Overall, I remain bullish on the crypto market as a whole, focusing on buying assets at or near long-term lows. However, I’ll be watching closely if we break out of the current range. That would coincide with a rising MVRV Z-Score (we’ve discussed this before), which is a red flag for smart investors to start trimming positions.

Until something fundamentally changes in my thesis, I still have conviction that we’ll see further upside— at this point in the cycle the majority of my holdings are in alts as the percentage increase on them outweight where I think Bitcoin can run to.

XRP vs. ETH Chart History
I’d be surprised if we didn’t get up near the fib extensions as indicated below.

Same goes for Monero (XMR)—we’ve discussed this in depth. With its recent breakout, I’d be shocked if we don’t see another leg higher.  We just need to wait for the capital flows. 

I’ll let you look at Litecoin.. But essentially, it's the same thing.  

As for the rest of the market...

A lot of alts are showing a different picture. A significicant amount of assets have slammed back into their lows from the recent bear market. Although I still don't think they’re dead, we may need to become more sensible with our targets.

This may mean that they only retrace in the current cycle (0.618-0.702 fib retracements) before a prolonged bear market kicks in.  

Outside of a surprise pump—like what Ethereum Classic (ETC) did in 2021—I doubt we’ll see many of them return to all-time highs this cycle.

That said, I still have the same underlying thesis that we will see price appreciation on these assets––as long as the entire marke gains momentum. It may just mean that we have to be more cautions as the rally begins to flash warnings from other assets or on-chain metrics.  

For example—if DOT retraces to its fib levels, that’s a 650% gain from today’s price. This is the most volatile market in the world. Play it accordingly.

Here’s my approach:

1. Buy assets with strong fundamentals—development activity, total value locked, etc.
2. Avoid leverage—it’ll wreck you.
3. Stay away from meme coins—rug pulls are inevitable.
4. Build a diversified basket of projects with real utility.
5. Then...sit on your hands.