Every major crypto is down between 30 and 50 in the last 30 days and it feels like there’s no end in sight. Sentiment is decreasing and i can feel the negativity creeping up again now.
This is going to be a fairly atypical video, because it’s urgent, typically a video of mine, takes one to four weeks to produce, but given that the market is crashing right now and i’ve received hundreds of messages about this, i wanted to put out something quickly because Of this, let’s quickly look at why the markets are down whether you should actually be worried for the long term and some actions that you can take today to increase your profits.
I want to start by saying: although crypto is down, we need to look at other asset classes. First, zooming out will help us set the stage for what’s going on in the world and zooming out.
We can see everything is down right now. The nasdaq is down significantly anything high growth. Anything tech is not doing well, even what’s generally considered the safe bet in investing the s. P 500 is down 10 percent in the last month. That’S a massive amount.
This is largely the result of uncertainty. Investors are waiting for earnings calls to come out this week and some policy decisions from the federal reserve that may tighten up monetary policy just a little bit. Basically, investors are concerned that the federal open market committee, the group that decides interest rates, are going to bump up rates quickly in order to fight against inflation. If rates do jump up significantly, this has the simple downside that will be more expensive to borrow money. This matters in stocks, especially high growth stocks, because they borrow money in order to grow at a rapid pace, so it makes sense that growth will slow if borrowing costs of money increase.
Now it’s unlikely that the fomc will decide to all of a sudden hike rates dramatically, as they know, this would cause absolute chaos in the market. Instead, it’s much more likely that they set a target date in which rates will slowly begin increasing. Now, how does this relate to crypto? Well, in times of fear, investors, especially big institutional investors, will move money to safer asset classes in anticipation of further drops in the market. This means, as that rebalancing occurs.
More money is pulled out of crypto and out of speculative assets and even non-speculative stocks and moved into more safe assets. One way to track if money is being moved to safer assets is by looking at the 10-year treasury yield. The yield of this government-backed bond will typically decrease in times of uncertainty, and if we look at the charts, the 10-year note has actually decreased 8.5 percent since last week. Again this is big money making moves in anticipation of monetary policy changes.
Then what we see is the fear from one market creep into other markets, which is what we’re seeing in crypto. People tend to assume that, if it’s time to be scared in one asset class, well, we better be fearful in this other asset class as well, and the funny thing is that this kind of ends up being a self-fulfilling prophecy: people pull money out, markets, dip fear Increases more money gets pulled out markets dip even further. It’S this vicious downward spiral. Then we have the added impact of russia. The central bank of russia recently came out with a report.
Titled cryptocurrencies trends risks measures in this report. Cryptocurrencies are compared to ponzi schemes and there’s a call for this outright ban throughout russia by the bank of russia, and this caused a little bit of an uproar throughout the world of crypto and hurt markets as investors, who were already on the edge of their seats. You know worried about crypto. They received this confirmation that you know this may be a good time to go ahead and exit the market for a little. While, however, it turned out that the opinions of the report were not a consensus.
The ban is not universally accepted. In russia, others have said that a ban of this magnitude would be virtually impossible, which i have to agree with you. I mean someone could just use a vpn in russia and still use crypto if they wanted to if it didn’t get banned. To me, this is something to keep an eye on, but it doesn’t feel like something that should keep you out of the markets entirely. Of course, none of this is financial advice in crypto, another way to judge fear in the market.
Besides the obvious of just looking at price charts and seeing bloody red price decreases, you can gain some insights by looking at the market caps of stable coins. This is because, in times of uncertainty, people will move some of their crypto positions to assets pegged to the dollar stable coins. In fact, this is a money-making strategy that i’m going to talk about in just a minute, but if we look at the market caps of ust usdt mim usdc, we can see that they have all had dramatic increases in market cap in the last month. So this leads us to the question: is this the end? Is this the long dark cold bear market that we’ve been worried about in order to better understand, i think we should look at adoption instead of prices, pretend that coin market cap doesn’t exist and ask the question: is blockchain technology actually being used more today than six Months ago, more today than a year ago, is it trending upwards?
This is important because in the long run, the value of crypto projects will be determined by the value that they provide. Is this technology actually being used? Where are the trends headed? So, let’s start off with nfts trading volume for nfts hit 10.6 billion dollars in the third quarter of 2021.
Up 704 from the previous quarter, facebook and instagram are finishing a feature that will allow users to display nfts on their social media profiles. Coinbase will soon accept credit card payments for nfts. This means you don’t have to deal with crypto in order to buy an nft. Some say this is a double edged store. They don’t really like it, but others think this is awesome news for the average investor the average person to get into nfts now play to earn games.
In axi infinity alone, there was 5.5 billion dollars locked in virtual assets. In november, in a single game, crypto games are gaining traction, they’re, getting more fun, they’re, getting more users and they’re even gaining popularity on twitch, and this is despite the fact that crypto gaming has only an 18 billion dollar industry market cap. That’S 1. 6.
The size of d5 and more than 100 times smaller than the regular video game industry. Now what about d5? According to d5 lama, the current total value locked in defy exceeds billion dollars. Now d5 2
0 was a fantastic innovation, however, it just simply was not user friendly enough for the average investor. Now, with defy 3.
things like defy as a service or just more usability in the space means, projects can appeal to your regular investor, who doesn’t have the time to learn the ins and outs of yield farming or just anything having to do with d5. Increasing the usability means an increased scope of people who can use these products, thus increasing the market cap for defy and crypto as a whole, then more broadly, we’re seeing more and more institutional investors embracing cryptocurrencies we’re seeing large corporations adding crypto to their balance sheets and Countries beginning to accept bitcoin as legal tender. This has largely all happened in the last year, so it’s safe to say that the industry is moving in the direction of adoption, despite prices declining in recent months. I think we would be having a completely different conversation if we couldn’t see those darn price charts. Now this isn’t me saying that you should dump your entire life savings into crypto or that it’s some kind of risk-free bet.
That’S not what i’m saying at all. I’M just saying actual use metrics seem to be increasing and that’s what will matter in the long term now from here. Let’S talk about how you can actually make huge profits during the bear market. There’S two strategies that i’d like to discuss here that i personally use and have seen a lot of success with the first is simply buying the dip. Now this is a bit obvious, but you need to be a little bit more tactful than just hucking your money into projects, and you know crossing your fingers that the market turns now in times like the current market.
Buying, the dip can feel like you’re straight up. Throwing cash into a bonfire i’ve been buying, and it feels like that, and this is a bonfire that is slowly consuming your home, but the reality is, if you believe, blockchain technology is here to stay. If it’s here for the long term, then there’s no reason, you should believe that prices won’t eventually go up in the long run. Now i have no idea where prices are going to be in the next month, but i do know that buying bitcoin today at 35 000 is actually less risky than buying it at 60, 000 in november. That is, if you think, crypto has long term staying potential.
My strategy is to buy the dip and not focus on the ultra speculative small cap cryptos for now, instead i’ll focus on the largest cryptos, the largest layer ones that i believe have the most staying potential. The simple reason for this is diversification buying a layer. One is like buying a farm with 50 cows. Instead of buying a single cow, a single cow can die, or maybe it gets mastitis. I used to work on a farm.
If you can’t tell, but the point is chances are, if you own the farm you’re not going to lose all 50 cows, if a layer one has 50 projects built on it, then you’re going to be okay. If one of those projects goes under and when money begins flowing back into the crypto space, you will be the first one to see gains money flowing to the space typically seems to go in this order. Bitcoin first see some gains, then ethereum, then other large layer. One blockchains and then smaller cap projects with potential, and then you see the speculative. You know crazy type projects gaining steam.
It seems to go in that order most times in terms of how much i’m buying i’ve already purchased quite a bit. But i always leave money on the sidelines, ready to seize any massive dip opportunity. So let’s say i had one thousand dollars to buy the dip. I may use 300 today and then buy 100 every five or so days until that money runs out. Unless i see a big dip in the market, even further, in which i may double the buy, that day to 200 dollar cost averaging, will help flatten out the volatility if you’d gone all in on the first dip in november, you wouldn’t be so happy right now.
Now the good part is, you can still make money with the money that you have on the sidelines. This is good either to put that cash reserve to work or, if you’re thinking you know, buying the dip. That’S too risky for me right now. I simply lend out my stable coins, always with this. You can earn some nice passive income and you don’t have to worry about any 30 corrections in price because it’s pegged to the dollar.
Now i do most of my lending on kucoin and i’m most familiar with how they do things, so this might vary a little bit depending on the site that you use, but on kucoin they add a layer of safety by offering an insurance fund. So let’s say you make 100 in profit by lending out usdt five dollars of that would go to kucoin for running the platform. Ten dollars would go to an insurance fund. This fund ensures that you get paid back if, for whatever reason, the borrower can’t pay you back now, i’ve looked through thousands of transactions on my kucoin app and haven’t ever seen. The insurance fund actually used, but it’s a nice peace of mind to have in case that buyer can, for whatever reason, can’t pay me back.
I’Ve been using kucoin for about eight months now, and i’ve personally made over 24 000 in profit just through lending i’ll, have them linked in the description. If you want to use that link, you’ll save some money on trading fees. Now you can also go the defi lending route and lend out something like ust for a pretty darn good interest rate. However, it’s important to remember that this won’t be held on an exchange, so if you want to quickly transfer it and buy the dip, there’s going to be a few extra steps in doing so. All in all, we need to remember that this is an entirely new market.
It’S easy to forget that the price we pay for massive gains is massive downside risk and we’re going to see this, and this is going to happen again in the future. This is why any purchase i make is made with the intention to hold long term, because i can’t guess where the market is going to head next week or next month. No one can, but i can look at sentiment. I can do my best to understand how the technology will be adopted, and i can invest based on five and ten year potential now, if tracking, all of this is too overwhelming for you, that is totally fine, you’re, not alone, you don’t need to over complicate things. Your investment strategy could be as simple as buying 50 a week in bitcoin and never looking at the news.
There’S literally nothing wrong with that or if you’d like even more up-to-date insights, you can join something like my patreon investment community. There we have a team of researchers and investors who do the work for you to find opportunities and to monitor the market. This includes updates on anything that i personally buy or sell. As soon as i do, it, that’ll be available linked in the description for as little as 10 a month. It really is an awesome deal and there’s a reason that we have more than 11 000 satisfied members now from here.
If you’re interested in lending, i would recommend checking out this video on screen that goes more in depth on how exactly it works, and i would like to thank you so much for watching and i hope you have a profitable day.