The Fear & Greed Index Chart is designed to capture and reflect the current emotional backdrop of whichever market it observes. Originally created by CNN for US stock market sentiment, it has been adapted for the crypto market.
These indexes have now been adapted to track the fear & greed of the crypto market. More specifically, there is now a Bitcoin Fear & Greed Index that I will refer to as F&G from hereon.
I am of the opinion that Bitcoin’s cyclical nature has to do with its innate properties, such as its fixed supply, and that factors such as this drives adoption and human sentiment towards the network and its native currency unit. The characteristic fixed supply of Bitcoin is particularly important as we have never before had an asset or commodity of its kind before. Furthermore, I believe the matter of its fixed supply alone makes Bitcoin impossible to ignore. It is only a feeling at the moment and I am not a financial guru nor financial adviser. I can only take what I know from my study of Austrian economics and apply it to current day and events. It is, however, my strong feeling that the presence of a cyclical nature in bitcoin is because some of the fundamentals that Austrian economists hold most sacred may actually be true. They are fundamental laws of our world irregardless of whether the people enacting them are aware of them or not. They are laws that, through the lens of data, can be seen.
They are, as Mises would put it, human action.
Today, we live in a world that is nothing if not data driven. Many say we live in the age of information. But I would argue that we are also on the cusp of a different era. A different age. A time of AI, robotics and something far greater.
Interplanetary voyage.
It is the 20s and 30s of this millennia that could prove to be those that saw us reach for the stars.
But for me to be right, I need to find evidence. I do not want to invest my time and wealth into companies and commodities based on gut alone. Failing based on that mistake might prove fatal and embarrassing. But more importantly than that, I am curious.
I want to see if Mises is right.
I believe that If I can keep a record of the price action alongside F&G sentiment as well as a comment on events as they unfold, I might be able to uncover some insight. Whether it is on the cyclical nature of Bitcoin or not, the events of world today are now inextricably linked with the hashing power and value of the network.
I also believe that our use case for the Bitcoin network and what we can benefit from it with are not limited to what they are today. Only time will tell, and a part of this writing is to simply keep a log or journal on events as they unfold.
The F&G Index I will be using is taken from alternative.me and I will leave the link below.
Fear & greed is by no means the most important indicator when planning or making financial decisions, but it is important. People are emotional beings and our decisions are based on emotion. Making a decision based on fearful or greedy and hopeful sentiment is still a rational decision. As Mises said:
‘He who acts under an emotional impulse also acts.’
The F&G index therefore can be used as a window into the scale of human action and I believe that if I can track the price action alongside F&G with a comment on current events as they unfold then insight into Bitcoin and of its cyclical nature may become more apparent.
But if I cannot accomplish that, then I will at least have a somewhat detailed log of events as they unfolded alongside the price action and F&G index.
And both endeavours are worthy my time.
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