Protection, Not Speculation...YET!
Hey Jessinvestors
The bull market in Bitcoin was announced a while ago, I would even go as far as to say as soon as the halving happened in May last year, it was ready, set go, and everything was right on schedule as is the case with Bitcoins boring and riding monetary policy combined with human nature, loving a good old FOMO and chasing anything that is scarce.
People often talk about how hacking happens in cryptocurrency and stealing of funds. I think it's a fitting trait of crypto since to me Bitcoin is actually hacking humans, to get them to think in a different say.
None of us could predict what 2020 and 2021 would be like with this pandemic and slow down, which has changed the face of how we live. Many people are without work, cannot get back to work, are working from home, and slow down in money velocity has seen people who relied on cash flow to suffer the most.
Count your pennies
Those who had a penny to spare are also worried, they want a place to put their money long term to net them a return, which banks cannot offer at a risk-free rate.
As economic growth slows so does equities in real terms, their income dries up, debt expands, and dividends dry up as they also feel the pinch of restricted money velocity.
If businesses and consumers, who are the lifeblood of any economy are both feeling the pinch, struggling to secure new cash flow and need to find a way to extend or protect their savings. They are naturally going to move to wealth protection assets.
Hard assets taking centre stage
Precious metals and even commodities are now starting to enter their bull run as people look to anything tangible that can store wealth. Metals naturally have a track record of wealth storage. At the same time, commodities will bank on-demand increase for goods, services and infrastructure as we get back to work and look to stimulate the economy through new job creation.
This has been the case after many a recession, but this is the first real recession we've had with Bitcoin available to us. To me, Bitcoin is acting as sensibly as it would under any recession, people are flocking to the thing that has the most predictable monetary policy, and that is provably scarce.
The penny or rather the satoshi is starting to drop for more people and institutions, and they're flocking to secure a piece of the network as we can all see with the price run-up. People are willing to pay well over previous call time highs to secure a piece of the asset.
Once they feel rich, they'll be willing to speculate
People are now asking me, well if Bitcoin is going up why aren't all the alts and here is my base case reasoning. If we look at the traditional economy when stocks go up, people feel rich, they sell their positions and reinvest to grow other companies, or they spend it on goods and service driving up economic growth.
This is the theory behind why money printing is good for stocks and the economy and how this weird idea of trickle-down is meant to play out, yet it doesn't really, only in a minute way and at what cost?
The purchasing power yous teal through inflation only to recycle it in a poor distribution model is silly, but that's a story for another time.
So take that theory and apply it to Bitcoin, if someone puts in $2000 at the beginning of the bull run and they're now up to $5000+ they feel rich. Now they're going to look at speculating.
The higher the fiats price goes, giving more retail investors paper gains grow they more likely they are to speculate in a more volatile asset. Bitcoin is still supplying growth, but as that slows down and growth is in the single percentage range, which happens in every bull market. People are going to take their newly earned riches and dump it into coins with razor-thin liquidity and pump up prices.
The average retail investor only goes by two numbers, % increase and nominal fiat dollar value increase, chasing those two figures up with irrational confidence always happens in every bull run.
When assets are overloved like that, it's time to get out!
Have your say
What do you good people of HIVE think?
So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."
Let's connect
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Posted Using LeoFinance Beta
More info why you see this.
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The Toruk strikes again lol I'm getting good at attracting the big T
And with this 18% drop in BTC overnight, it's time to protect a bit more! Think I'll reopen the DCA approach again now.
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Already way ahead of you, picked up some yummy yummy sats today. If you don't want to DCA the boring way, get some USDT and set some buy orders at stupid prices and see if they get filled lol, I do it and I'm often surprised at the prices people will let go of their BTC at
Yeah man, we're like the hungry hippo institutional investors, except with much less money haha!
You know how it is mate, taxable events and all that shit! I could set buy orders with gbp instead though but after playing the risky stuff in my early ventures to BTC, I'm fine with the boring approach! Plus can't get taxed if I'm just buying and HODLing 😁
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LOL damn, I can't imagine being hamstrung like that, it's as if your government doesn't want their citizens to be wealthy and thriving, punish those trying to be self-sufficient why don't you?
At least they make HODL'ing even more attractive, perhaps I'm looking at it wrong and they actually want people to HODL and pump the price
The Establishment is back in Control.
Jessie Shopping List; More PMs, Some more Crypto, Food with 25 year shelf Life, network with a local Survivalist group....
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I heard you guys had a 8pm curfew and it’s getting hella commie that side, I guess your plans are looking less and less crazy as the days go on!
I’m actually keen to see how this “recovery” works out, and this “pent up” buying from people sitting at home I don’t think it’s going to be as big as markets are pricing in up it will obviously push things up!
I’m just thinking that there’s only so much people who can save and how many are left after over a year of all of this
i just want the prices to drop even more :P
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LOL I don't take chances if I see BTC go down I buy, I catch that falling knife everytime
Not completely agreeing on this. There are some banking instruments which can give you rush free returns like FD (fix deposits )
But Yes, the return will be little low 👍
I would disagree with you there sure there are banks in some countries offering positive interest rates, but what is the inflation rate of that nation? many if not most fall to the fisher effect. SO you may have a nominal positive interest rate but you could be actually getting negative or zero interest due to the inflation rate of that currency you're getting paid in
I'm betting bunch of those BTC rich folks are going to pump alts with their newly found money. I think at least some people are ready to take their profits after the recent price action.
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Once you're in profit and you feel like you can play with the houses money then it's game on, let the alt coin gambling begin lol
Well... I think BTC may "dictate" the rules, but it does not establish them in the long run.
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For now, it only seems to focus on bringing a measuring stick to a market where we have no way to properly value anything, that in itself is a huge task!