Forgetting the Past: Adjusting to the current cycle is only made more difficult by being hostage to previous ones. Take asset allocation. Investors are flocking to cash. Inflows into money market funds surged last week, and cash-equivalent holdings rocketed to $5 trillion. Assets without yield, like gold and bitcoin, are especially vulnerable during periods where cash is attractive – they offer no yield, and cash is usually attractive in a weaker economy. The tightening in bank credit conditions reinforces the attractiveness of cash. Surveys of loan officers put the supply of bank credit as tight as the 2000, 2008, and 2020 periods – all notable for economic downturns. "Hide in cash and buy cheap assets on a crash" has been the model for the past three decades. And it occurred when cash was safe. Cash was safe in real terms as deflation was the main threat in those downturns. Cash was safe in nominal terms because nobody thought twice about the surety of basic bank deposits. Both are now being called into question, supportive of non-yielding assets held without leverage, like bitcoin. Yet, even digital asset markets are deviating from norms. Bitcoin generally loses share when digital markets are rising, as easy capital makes its way to smaller growth projects. Not this time. The rise in bitcoin’s dominance reflects a more disciplined cycle, not predicated on speculative excess. Emphatic to this point, our Pulse Score on digital financial conditions is near all-time tights, with credit and income markets exhibiting restraint, and there has been outflows from digital funds in each of the past six weeks. Tight credit and rising prices – discipline reigns. This is your grandparent’s crypto rally.