Why Are We Still In A Bear Market!? Let Me Tell You Why...
Market down? Why?
The market keeps going down and down and down, the bounces are weak, the volume is weak, everything is weak! And why is that? Why isn't the market going up with so many bullish news? It's simple... value!
Money value flows, it isn't created out of thin air! If someone prints more money they are only devaluing the current money and transferring it to the new freshly printed money! But in the end, value flows around, from one place to another! The same thing happens in the market...
If the market is going up, it's because someone is pumping value into it! Back in 2017, people were taking loans and mortgaging their houses to pump more money into the market! Pumping value into the market! That's why the market was going up! But let's think for a moment...
Think about the average person!
All those people that bought into crypto with their life savings, with their loans and mortgages are at the moment exhausted! Yup, they are really exhausted, most of them are probably trying to pay their loans... the smart ones are saving their money to buy in when the reversal is spotted. So, the value being pumped into the market by the "average person" is minimal!
Now let's look at all the cryptos we got!
How many cryptos have constant money influx on their dapps? How many cryptos are widely adopted? How many cryptos have companies, people, buying because they are using them? How many cryptos have a buyback system? Almost none...
If companies and people aren't using crypto no money is coming into the market!
In the stock market companies have buybacks and dividends, both these system make it so there is a constant influx of money into the stock market!
If Apple buybacks 63B of their stock the price is going to pump! Because of speculation, because of the influx of 63B and because of the reduced supply! But they can only do this because Apple makes money!
Look at dividends!
Apple gives out 1.71% annually as dividends, so they give out 1.71% of their Market cap to people, either in the form of money or Apple Stocks, imagine 50% of these people choose to receive it in stock form! Doing some math, Apple's market cap is, at the moment, 807B (it took a bad turn some months back, but it doesn't matter to explain my point) that's almost 14B that they give out to people, in which 50%(in this example), so 7B is pumped into the stock market, mainly their stock, Apple!
Now, tell me... how many crypto companies do this? How many cryptos are actually generating cash to buy back their crypto? Next to 0... so there is next to 0 money flowing into the cryptomarket...
There are some cryptos that are going to do this, they have mechanisms to pump constant money into the crypto market, they have buybacks, dividends, etc... but at the moment they are still developing!
I could also mention why BTC, AT THE MOMENT, hasn't been the best store of value around... but that's a topic for another post...
Now that we just looked at the influx of money, let's look at the outflow of money! We got 2 main outflows of money in my opinion...
The first outflow of money are traders!
I've stopped posting for 6 months to learn some trading, now that I'm back I'll give you the hard truth... Most people on STEEM have no idea about trading! I'm not saying we don't have good traders in here, we do! What I'm saying is that, the non-traders that say, "trading is stupid, you will only lose money, there is no way to predict the market, this is all manipulated, it's all speculation" don't have a single idea about what they are talking about!
People... I know good traders that take out of the market, 6 minimum wage salaries, monthly! Do you know how much that is? In my country the minimum wage is around 650 euros... so, 3900 euros, every single month, and they are really small fish in this big ocean! They do this has a hobby! The big accounts with millions to trade can probably take hundreds of thousands!
And do you know how much they keep in BTC? Very little! Do you think we have enough money going into the market to feed all of these traders? No... so this only adds to the selling pressure!
The second main reason, in my opinion, that the market is going down is...Ethereum ICOs!
The way Ethereum works is, people buy ETH to buy into ICOs on the ethereum blockchain... the people that made de ICOs will in turn trade ETH to finance their ICO development... now, this is a flawed system...
Why would an ICO keep their ETH? They would in a bull market because they would hodl expecting a higher price, speculation! But in a bear market, it wouldn't make sense to do that! It would make sense to dump it on the market and cash out! And that is what is happening at the moment!
A large portion of ICOs are cashing out into fiat because of the bear market, the outflow of money increases!
This whole thing might change with Ethereum turning into Proof-of-stake, there would be an incentive to hodling! Also, cryptos becoming more widely adopted would also decrease the probability of people cashing out into fiat!
But, since ETH is still proof of work and cryptos aren't adopted ICOs will keep cashing out into fiat, and the outflow of money will keep going! And I think the worst is yet to come! Mass delisting, mass ICOs bankruptcy like NEM, a shift of crypto trading money into other markets, etc...
Now to end this whole thing... Let's make the math, money coming into the market at the moment through adoption, through speculation, through buybacks or dividends, next to 0, money going out of the market, a lot! So... the bear market is still going...
I think this whole thing will change when cryptos become more adopted, when we get cryptos that pump money into the market 24hours a day 7 days a week! when traders see that the forex market is much more volatile at the moment and when the people shorting BTC on bitmex and bitfinex feel like their BTC needs to be worth more and start longing!
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Question of the day: What is your favorite crypto or dapp that might bring big bucks into the market?
I should probably change these templates since I'm not studying to be a Vet anymore...
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Well, I know one Crypto that pays out it’s users... Steem. Not everybody uses their liquid Steem to power up, but there is an incentive to stake and post or curate...
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Yes, it pays users, but the money isn't created out of thin air, the money goes from people that buy STEEM to people that get STEEM through steemit, dtube, dsound, etc... the amount of people buying STEEM atm isn't very high, while the people powering down, spamming the blockchain, etc... is very high, all the STEEM that those people get is being dumped in the market... The staking system is good to make the price not drop fast, but in the end if there is more STEEM being dumped on the market then it is being bought out of the market the price drops... And I see no enterprises buying STEEM to make their own Steem pages, etc... maybe someday they will do this, to get "ads on the blockchain" but that's still very very far in the future
There aren't enough eyeballs on steemit to care about coming here as a business. The marketing cost to reach people scattered all over the world might be fairly low, but in reality who needs to reach the whole world? Not many businesses have the same message to people in the US, Europe, Asia and so forth. They tailor their ad campaigns based on the region they are doing business.
To target market on Steem would be hard as there aren't enough users in any country to care about marketing to them directly.
All of that I feel will change over time, but businesses won't care about this blockchain until there are probably a solid million REAL users. Even then it won't be taken to seriously. At that point I don't think we are going to care about businesses as the price of steem would skyrocket with a million users, but it would be an added boost.
I agree, it will take very long, and probably large businesses won't target STEEM very early, what will drive the price up is STEEM buying to convert to SP... but sooner or later they will come, imo, the golden age of cryptos will really start in 2025, all the good projects I see have roadmaps really picking up and getting adoption by large enterprises in 2025, that' where I aim 2025-2030, by then we will probably have 1 million users easily on Steem, especially since at least 1 more bubble has happened... Which will bring even more users to steem! Let's hope that we make the whole STEEM blockchain better by then! For the next generation of crypto addicts!
I feel we are all in very early, with some that got in on the ground floor being in insanely early. But even right now someone can come in and be a dolphin for around $1500 if they wanted to start with a decent stake. Any dolphin will be sitting pretty if we see 1 million users.
Also completely agree about the value coming from people powering up. It's why I give away delegations to newbies to help get them hooked. Long term they are the most likely people to turn around and invest adding SP to their accounts. We need to keep onboarding new people and helping them grow to a point they can support themselves, but having seen what a great community there is to support now people. Teach them that is how things are done and they will then do the same to future newbies once they can. It's a cycle of support and compassion that can make this place great.
2025-2030 would be great for me, that is when the kids will be starting college and their college years. That is the first time I'd consider taking money out of my steem holdings.
We just need to take care of the spammers and circle jerkers that are abusing the platform and taking out a lot of the money... the 2 main things we can do against these type of people is 1. flag them 2.witnesses need to start voting for better code... the problem is that we got some witnesses that want to vote for bad code because they are either getting paid by whales or getting a lot of profit with the current system! All of this needs to change!! We are in a deep bear market, and this is the best time to build and grow stronger a stronget STEEM!
American? In my country each college year is around 1k...
Yes, just outside of Chicago. College here for a state university is $25k+ with book and housing. Want to go to a good private school that can jump REALLY fast and high. Honestly I don't feel college is the best use of most people's time or money, but to many employers still think there is value in learning stupid shit nobody uses in their jobs.
A much better use of time and resources would be skill training. In 2 years of an unpaid internship kids would have more useful real world knowledge to being a useful employee then any 4 year degree can provide. In those 2 year they not only work during the day, but have online classes for things that actually matter to your industry.
It's crazy to strap kids with 100k in debt coming out of school and a majority of the time they don't find a job in the field they got a degree in. But employers want that piece of paper...just stupid.
So true... and by the way, I've been flagged for saying less than that! :-P
You should have asked for "help" when you got flagged for saying this, I'm not the only one saying this, some of the top witnesses say the exact same thing, the system needs to change to make STEEM better!
I was eventually helped... by the @pifc community! :-)
And I didn't need to ask!
You should have, I'm sure FTG and the friendsofgondor would have helped you out... I had friends going away from STEEM and selling all their STEEM because of something similar... if they had asked for help they would still be here, helping grow the blockchain and the ecosystem!
The worst part is that the person that went away actually did tutorials to make the posts better looking! He was helping a lot! But he had some wrong world views which got him flags...
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This is a great post!
I agree with everything your saying. Also on the trading front, I have recently pulled out of all dapps and changed to usdt on binance.
Trading pays more than any dividend 1000x a day.. Sideways market is very easy to trade on just simply between support and resistants lines, I like the simple things not to learn to much and go to mad on it hahahah
Yeah sideways is easy to trade, I normally trade pumps and dumps shorting and longing on Bitmex, but I need to start trading resistance and support lines too... trying to get better at this since I only started a few months ago and I've had many setbacks...already doubled my bags which is pretty good
I kept it so simple that I dont even know the meaning of shorts and longs hahahahahahahahha :)
It's basically betting that the market is going to go down AKA shorting, or that the market is going to go up AKA longing, so you make bitcoin no matter where the market goes! And you can even leverage, so, imagine you are betting 10 bucks, if you leverage with 5x leverage ur 10 bucks would act as if they were 50 bucks... ofc there is a limit to how wrong u can be, imagine if u go short and the price keeps going up, sooner or later u will lose all the betting money, and if u use leverage the price that this happens is closer to ur entry price, so it means u lose quicker! The price that u lose ur bet is called liquidation price! Bitmex has 100x leverage on bitcoin, and the liquidation price is really really near ur entry price... sometimes a wick is enough for u to lose it all! I normally use 5x leverage, sometimes 10x if I'm sure of a trade! With a stop loss that makes me only lose 5%-10% of my bet tops!
I think theft, taxation and kyc laws (know your customer) are issues too. With centralized exchanges being targets for theft, and tax laws and kyc hindering the adoption of decentralized exchanges by the general public.
I need to do more research into decentralized exchanges, but, from what I know so far, they are the future! They are more theft, kyc and taxation proof, and when taxation becomes more of a thing in cryptos, people will flock to DEXs! I'm waiting for the binace DEX, maybe that will cause a mass change since most people trust CZ very much... most DEXs atm have 0 volume in that, no liquidity, nothing, i'm sure binance DEX will fix this!
Have you ever used a DEX?
Actually, unless people start flocking to privacy oriented coins I think DEX's are more subject to taxation and public scrutiny. They do solve a host of other problems like someone stealing millions of dollars of ETH from places like Cryptopia.
Unfortunately, the way the US tax regulations are written right now crypto to crypto trading or mining coins is a taxable event. This is an almost intractable accounting burden for someone of my age and intellectual abilities.
So with that in mind my business income comes purely from software engineering, blogging and creative endeavors. I might have tried a DEX once or twice but I didn't inhale, LOL.
There are no taxes in my country thank god! And if they ever happen to create taxes for cryptos I will either not pay them, keeping everything in crypto, or change country... the nomad way :P