[0231] When Bear Market is Over, We May Be In for a Rude Shock
Once the bear market is over, crypto investors may be in for a rude shock. The world has turned and the moonshots, lambos and price hype may be a thing of the past.
And don't call it FUD. It may be fact.
In my last post, I wrote about why I think the bear market was over ages ago and we're now in an "institutional bull run". With big money players buying Bitcoin to back their financial products... quietly, via OTC trades which don't move the price... the crypto market has "moved along" even if the prices have not.
OTC trades don't affect price, so while the price signals stagnation and a bear market, the growing volume of big institutions buying up crypto is increasing. And has increased during 2018 as the regulatory frameworks are put in place, green lighting their entry into the market.
So what?
While the crypto community is mesmerised by "mass adoption" and thinks that public adoption will be the driver of price ( and their sagging portfolios ), mass adoption by the public sector is still some years away.
We won't get high numbers of people using crypto in shops without a proper refund system, for one thing. The lack of a refund mechanism is a red flag in my mind but once blockchains devs turn their minds to the subject of how to create one, this will signal a bullish move for public adoption. All of this will no doubt be handled by POS devices, but what I find interesting is the lack of discussion about the topic. As though it's not an actual priority.
Which is another topic.
The thing is that institutional mass adoption will come way before every Tom, Dick and Harry on the street buy crypto. The banks will be the ones rolling out the red carpets and selling it to the peeps, not Binance. Banks, with their plastic smiles, will be the major retailers of Bitcoin.
Public mass adoption won't be the next driver of the crypto market in 2019. So if you're waiting for it, you may find 2 or 3 buses pass you by while you're waiting at the bus stop.
The tide has really turned in the crypto space. The next two drivers of crypto will be "back end" trends in 2019. (a) STO's or security token offerings ( not ICO's ) and (b) the impact of institutional investment. Which we have yet to see how it has affected the crypto market.
The market has already swung towards STO's and moved away from ICO's who are biting their nails whether they will be retroactively fined for breach of securities laws. The move to law abiding STO's is apparent, so companies like #Ethos who set up shop on a legal framework will surge ahead of the crowd in 2019.
But the impact of Mr Bank entering the market will be shockingly revealed once the curtain is raised after the bear market is over. How has it affected the market?
Noobs are crying out for Wall street to come in and pump up the markets so they can ride the wave. But will the crypto market work like it did in 2017? It may not.
With all that capital moving into Bitcoin, the reverse may happen. The market may stabilize. As has happened to every other market that Wall St has entered into. The price of Bitcoin and altcoins by relationship, will probably lose a heck of a lot of volatility. With so much money shoring up the price on the upside and downside, will Bitcoin ever see anything above a 1% or 2% rise or fall in a day?
Once big money comes in and acts as an anchor for the market, we may not see the moonshots we did in late 2017 where Bitcoin went from $8k to $25k AUD in 4 days.
The effect of "price discovery" by the big players will be interesting to watch and I wonder if we will see major fluctuations in the market to profit off. We might. It's early days.
One thing I do know is that the crypto market has transformed during the bear Winter. And when it emerges from it's cave, the rules for how to play the game may have changed quite a bit.
Thanks for watching,
Brendan Rohan - Indie developer of 'next gen' natural medicine from Melbourne, Australia
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