No Stability To Be Found
Financial markets and economies are in a state of chaos, despite the reassurances being offered by certain politicians and the like. I understand that the primary objective is not to cause alarm and panic. However, how can citizens prepare themselves if they are led to believe that everything will simply be ironed out over time? Sometimes you need a bit of a shock, in order to realize the magnitude of a situation. Inflation remains aggressively high, while interest rates continue to rise. This does very little to paint a picture of serenity and stability. The reality, however, is that the wind has been completely taken out of the market’s sails. Sure, we will continue to see the occasional pump, but it still appears to be way too early to expect a reversal. To be honest, I don’t see much of a reversal, once markets bottom.
An Eventual Bottom
I expect somewhat subdued market conditions once markets realize and solidify a bottom. The only real reason markets rallied so hard post covid, was QE. Not only are we void of QE this time around, but we also have the exact opposite taking place in the form of QT. This is extremely damaging for the stock market, as well as Crypto, considering that it is being classed as a risk-on asset. I do however believe that Bitcoin would benefit from some sort of banking crisis post-2022. Were this to take place, I believe that it would be a catalyst, ultimately encouraging the long-awaited decoupling from the stock market. We also have the halving scheduled for 2024, which is yet another bullish catalyst. Depending on the strength of negative sentiment at the time, BTC could begin to break away. This would simultaneously signal a maturing of the Crypto space, an asset class coming into its own if you will.
A Process Requiring Time
Regardless of what transpires over the coming months, the market is trapped in a scenario that will require time to escape. Even in the case of Bitcoin, this is now very much a process. Events have escalated way too far to simply bounce back and continue the show. On top of that, the FED will continue to execute its plan, ultimately rendering markets weak and fragile. This is where those who are actually earning Crypto have a fighting chance. The general Crypto strategy of “loading up your bags” and waiting is not really going to be effective in these market conditions. Especially, since many already loaded up months ago and are currently underwater. The typical speculative play is off the board for now. However, if you have a rather long-time horizon, you may still find it attractive.
It’s Time To Earn
For fear of sounding like a broken record, this is where those who have developed income models have an edge, especially, passive income models. There are numerous other ways to generate Crypto income, including opportunities such as Hive, affiliate programs, and multiple earning opportunities within the Crypto space. Alternatively, many traditional online income sources can also be utilized to earn, and subsequently, purchase Crypto. Relying on price appreciation alone, as a speculator, could prove to be somewhat disappointing. Trading falls into the “earning” bracket, as one can open and close positions as markets continue being volatile within a rather predefined range.
Once again, we are experiencing the harshness of a Crypto winter, as regulators crack down on stablecoins. This is primarily in regard to algo-based stablecoins. From what I understand, backed stablecoins, such as USDC, and even BUSD are not being targeted. However, I am sure both entities will have to disclose exactly how their stablecoins are backed. It’s definitely a challenging time on all fronts. In the meantime, keep earning, and keep growing, no matter how challenging it may be! See you next time!