If higher inflationary environment Crypto is exactly where you need to be. Let me explain.
US markets crashing again today. Dow Jones Index down 500 pts. today so far. We have seen a tremendous selloff in stocks last week with Dow falling 10%.
The market is selling off for two main reasons.
#1 The epic stocks gains in 2017 (40% gains) need to be consolidated. After this type of move up its healthy and normal to see consolidation, so that later a new up trend can form and take the markets to new all time highs later. We are seeing the same thing in Crypto as of late. After the epic 2017 Crypto breakout year into mainstream gains need consolidation before we can mover higher hopefully by the summer. Fingers crossed.
#2 Inflation Fears! This is what's likely causing most of the panic in US stocks. Let me explain. Inflation is simply a rise in prices. In this case its being caused by rising wages. Remember the Trump taxes cuts? Corporations were able to keep more of their profits so many companies decided it was time to increase wages and expand work force. This is a positive not a negative for the US economy.
Here's the problem: Feds have created (printed) 7 Trillion dollars out of thin air since the 08' Financial Crisis. All those newly printed dollar bills have to go somewhere. Best you understand this because if you are holding dollars it affects your buying power. New dollars dilute the old ones. So in the end you'll have less purchasing power. For people who understand Bitcoin's limited supply and nearly every Crypto limited supply or in ETH's case finite supply understand this fully. We can't just go out there and created more Bitcoin's out of thin air even if you and I or a whole lot of other people wanted to. You'd never get the stakeholders to agree, miners, hodlers and nodes to increase the limit past 21 million. This is hard coded in Bitcoin's code since day #1. Its much like Gold supply. Extremely limited.
So you wanna be in Cryptos and Gold if inflation gets high. Stocks can do well inflationary times too b/c companies can just raise prices to keep up with increased cost. However, if we get into a bad financial situation again like 08', from all the World's outstanding debts, investors will flock to safe heavens like Gold, Bitcoin and most Cryptos that is outside Governments control to just print off in a whim. Again, I am not here giving people financial advice its just sharing what I know about Economics and Investing based on my long track record.
Good luck.
Now this I understand perfectly and is exactly what I've been thinking. In fact I was pumping money out of SBD at 10 and directly into cash and gold. Now I'm building back up my SBD and steem holdings at this lower price. Seems like my timing was spot on.
Along with shorting the Russle 5000. Let's put it this way. I've had a very very good start to 2018! You're analysis is excellent and all these pullback are super healthy and great opportunities to get in. I do have a clue on the subject matter. I've been trading marketw since I was 22, now 35. Just my first time dabbling in crypto.
Those who say bitcoin is on it's way to zero, are just haters and don't know what they are talking about. This pullback to 7k in bitcoin looks pretty fair and normal to me, based on the extreme volatility of cryptos in general as well as how tight markets can often swing too high and too low in tops and bottoms, I'd say a bottom is what we just had in Bitcoin, will zig zag it's way back to 20k fail once or twice to break that. Then blast through and make new highs. Probably this summer/fall. Just my gut feeling. I have no crystal ball.
So on a more personal note. I finally got out of the Galapagos. Was there for almost two weeks. Had awful internet so all I could do was post through steem auto. Now I can comment on your posts too and others....
So glad to have good internet again. Seeing the incredible wildlife and nature was great but the lack of internet was a real drag. Thanks for supporting my work though while I was semi-MIA. I'll be around more often now. Hope you are well and have a great day! -Dan
Well stated and I agree 100 percent!
Rising long-term inflation is more insidious than we might think because it can steadily and most assuredly decrease the value of our earnings/savings. If Bitcoin were accepted as the world’s reserve currency, this could potentially create an environment that could curb inflation and introduce a moderate amount of favorable deflation until all 21 million bitcoin are eventually minted.
I've actually sold most of my funds and trackers on Tuesday. I prefer cash as a position over stocks right now. And easier to get that into crypto as well ;-)
Good advice. I think crypto and precious metals have huge upside and not a whole lot of downside. Especially when you compare it with the Fiat dollar. Great post
I think Bitcoin is hurting gold and other assets.
I agree. There is only so much wealth in the world and cryptos are taking a bigger and bigger portion of the pie.
There is also a lot of money that is simply disappearing due to valuation models being changed. Stocks are being evaluated differently which is driving prices down.... well deserved too as their values were inflated based on forecasts of potential profit margins following tax reform.
People are starting to question how much longer the US economy can follow this cycle of print, borrow, spend. Tax cuts were a joke. Simply robbed any ability to repay debts.
Gold and Silver require a safe place to store them. Cryptos on the other hand... they are versatile, new, and easy to trade peer to peer, outside the grasp of government.
I disagree with some of your premise. The government can pay a billion dollars for people to not work and do nothing but drugs and party or we could pay a billion dollars to give homes to 10,000 to 100,000 homeless people so wealth can be created or destroyed.
I think wasteful government spending has caused us to run out of money for the bond market and the stock market so bond prices have to go up and stocks must come down until we get more QE.
Unfortunately I think deficit spending can go forever but eventually our USA currency will be practically worthless.
I like gold and silver. I consider gold and silver cryptos and cash to all be somewhat fiat. Sure gold and silver and tangible but people could decide they don't want to buy them. Right now I am most bullish on bitcoin and bearish on most other assets other than ones like cheap used cars and cheap houses and essential supplies like food and beverages.
I think Bitcoin is killing the price of other assets which is good for Bitcoin holders.
Its def disrupted the VC industry already.
Interesting. I haven't even heard about that.
Indeed, cyptocurrencies are great, because all of them have limited supply. Unlike the dollar, you can't simply print more coins than the limit. Dollar is bound to crash :)
Do you think that the bitcoin miners would ever agree to adding another decimal place in fractional holdings. Would that not increase the supply?
Like a stock split? Probably not but I know some coins like Dash with built in Governance are already talking about this possibility at some point. Instead of .00000000000001 BTC for your lunch today its 5 Smart Cash. Only a coin with built in Governance could pull it off in my opinion. The future of Crypto is def going to be interesting. You brought up a great point.
Thanks for the post, I liked your information Thank you very much, I join you
That's why we are in cryptos. This year is gonna be hot when all cash bags comes to crypto world.