Worse than 2008?! Investors are bearish. Really bearish. It is evident in cash holdings. Average cash is the highest share of assets under management since March 2001, exceeding the pandemic and financial crisis. It is evident in financial stability. Investors see the risks as greater than the 2008 crisis. Sentiment on global growth is the worst since the survey started in 1994. Tech is the largest short, profit expectations anticipate misery, and monetary risk is considered the most substantial of all. It is not to say that crowds are wrong. The wisdom of the crowd systematically beats the genius of the individual. It merely signals that the market is ready for a new narrative. Clues on that new narrative are evident in what hasn’t happened. For instance, the crowd of equity analysts have not shifted their tune, at least not in nominal terms. In the past month, 2023 consensus estimates for S&P 500 are up slightly (even excluding energy). 2023 earnings estimates are flat, down only slightly outside of the energy sector. Investor sentiment says that things look like the 2008 financial crisis, and equity analysts, with accounting precision to their craft, are chilling by the pool. Can both be right? Sure, under nominal illusion. Investors benchmark to past cycles where recessions led to deflation risks. Equity analysts see what they see – they may lag the reality, but they don’t diverge! Inflation squares the circle. Nominal activity may not look anything like the deflationary norms in downturns of the recent past. And this is where digital is interesting. Through the degradation of risk assets, the price-halving-plus in bitcoin, and the extinction of Terra-Luna 1.0, investor flows in digital assets have been remarkably steady. Shares outstanding in the BITO exchange-traded product are down a modest 13% from the highs. The new market narrative will look beyond the current economic downturn, the inflation surge, and the equity crunch. The characteristics of this slowdown/recession are what matter most. Will deflationary risks re-emerge, or will nominal activity press ahead? Equity analysts and digital investors are saying this time is different. Because every time is different.