Adopting Discipline: Cycles often oversteer. Periods of excess investment in commodity markets are often followed by cautious supply and scarcity in the next cycle. Oil prices traded below $15 a barrel in the 1998 Asia crisis only to have Asia demand bring fears of peak oil as prices rocketed above $150 a short ten years later. Digital asset markets are illustrative of this oversteering pattern with exuberance being replaced by discipline. In the 2021 price surge, bitcoin’s share of crypto asset capitalization fell from roughly 70% to 40%. Cheap capital chased small, speculative projects. By contrast, bitcoin is gaining share on this year’s outsized price gains. Option markets are vibrant with open interest in BTC terms nearly double that of the previous cycle high. Yet, volatility expectations remained subdued. One-month at-the-month implied vol is 70% versus a range of 50-150% last year. Exposure of large players in bitcoin futures has also leaped to new highs. In the last cycle, the cost of buying bitcoin forward surged with demand, implicitly charging a very high-interest cost for the exposure. Implied rates are currently running at a tame 0-5% annualized this month. Restraint is also evident in credit markets. Yesterday, MicroStrategy revealed the repurchase of its collateralized loan at a 22% discount. This eliminates the threat of disorderly deleveraging on a decline in bitcoin’s price below $5k, which would have drained the company’s bitcoin collateral. It cleans a stop-loss that was tempting for the bitcoin market to contemplate. Long, bull cycles are borne by disciplined capital, as is evident in price corrections like the current one. Who knows, regulation by enforcement may be a blessing in disguise. It rewards patient builders. So, build.