Why The Crypto Markets Are Selling Off?
This is something that everyone wants to know. Why is crypto taking such a massive dump?
In this video I discuss the idea in an effort to create a framework for people to oeprate from. This is taking place in the context of something larger than just the crypto markets. In fact, it is tied to the entire risk on/risk off trade. With the economic outlook starting to turn gloomy, markets are getting a bit jittery, at least in the short-term. There appears to me to be little disconnect between crypto and the risk off move in equities. We can even refine it to isolate the tech stocks, which are deemed of greater risk as compared to the consumer staples.
For this reason, we do not have the idea of a flight to safety being cryptocurrency. It is still a speculative asset class.
▶️ 3Speak
Commenting before I watch... but yeah, EVERYTHING is down, not just crypto... We need to remember why we are in this in the first place, or at least the ones that are here for the revolution and not just the dollar based gains. All I know is that if we go into a bear market or extended consolidation period, that is a nice quiet time to build and market actual projects and we can hopefully let the meme coins and silly useless tokens of all kinds kinda just die out.
Edit after watching: Fairly grim outlook you have there bud. But yeah, it's not looking great for allot of things. Luckily allot of my funds are in stablecoins or are paired against stablecoins. But again, waiting on the bottom then keep stacking... Just hate that I have to go back out there and earn fiat, lol. It's been an awesome 4 month experiment in full time crypto, lol.
Well the outlook for the economy and the markets can be two different things. Markets are about the flow of capital.
With the risk off trade, due to the economic outlook, we could see that short lived. In a global economy, we know that capital flows even when things are bad. Hence the US equities and crypto could still receive inflows.
Risk on can occur even when things are bad.
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Only think I can do is try to protect me and mine. 12% HBD savings, and pairing against the dollar in LPs and earning yield. Now is the time to compound. My main rule is staking when it’s down, selling when it’s up. That's with my cash flow... the base has been staying as is and compounding.
Having to go back to the fiat businesses for now while all this is going on and trying to build the yield.
That is a sound practice. We have to adapt with the market conditions. Fortunately for me, I still have some time left before my fiat stash is exhausted.
We all can only hope for another massive explosion over the next year or so.
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I think we will probably see more bad data out of China. Recently, I saw that they were trying to increasing lending before the Olympics so they won't be blamed for crashing the markets (incase it does).
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LOL yes I came across that theory also. Not sure it is valid but not going to debate it. That could be happening.
China is big on show and perception. That is why the economic situation is being glossed over by so many. They believe the show the government is putting on.
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BEERKING.Everything is down in crypto today and even stocks are down. I think if the bearish market continues then its surely has a chance to accumulate more. Those who will do this will be happy so instead of worrying its time to increase the stake.
Yes, it is and I think it is for the short term too and nothing to worry about for the long term.
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When having a long term view, in my opinion, being able to add during times of pullback is one of the ways that we see huge success when things turn.
Also, on Hive, we can just keep being active and accumulating more.
Hence we are better positioned when things go green.
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This is when you get greedy when everyone is fearful.
That is the saying yet is hard to do. But you are correct.
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Irrespective of how red the market might be right now, taking the good side of it by buying more is definitely the right thing to do.
Panic selling will only end up with regret
Panic anything never ends well so I agree with you. When people do things based upon emotion, bad results usually follow.
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Yes, I agree, even if the instruments in the crypto sphere are more diversified than they used to be and you can find options to mitigate risk, crypto is still widely viewed more as gamble than safe heaven.
The media certainly does not help with that by pushing their narrative. Nevertheless, we are not seeing a break in the correlation between the two.
One thing to keep in mind is many of the investing options around the world are bad. The EU and Japanese bond market were totally nuked. So perhaps crypto will end up gaining in the long run.
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I certainly hope this will help the case of crypto.
As long as I believe in the fundamentals of whatever I am doing--that there is real value--I let the markets do what they do. Same with life in general: If I believe I am doing the right thing, or at least not the wrong thing, it doesn't matter to me what those around me are doing unless they are hurting something/someone I love.
Making decisions based on others' behavior puts them in the driver's seat of your life--where they don't belong. !BEER
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Summary:
In this video, Task discusses the reasons why the crypto markets are experiencing a downturn. He explains that cryptocurrency is part of the risk-on, risk-off trade and has not yet achieved the status of a safe haven asset. Task attributes the recent sell-off in the crypto market to a broader risk-off sentiment in financial markets, driven by concerns over economic conditions, particularly in China and Europe. He mentions factors like the flattening yield curve, China's weakening GDP, global supply chain disruptions, and concerns over Federal Reserve tightening as contributing to the market sentiments.
Detailed Article:
Task delves into the recent downturn in the crypto market, emphasizing that cryptocurrency is considered highly speculative and not a safe haven asset. He highlights how during times of uncertainty, such as seen recently in global economic conditions, investors tend to move away from riskier assets like cryptocurrency and tech stocks towards safer investments.
He draws parallels between movements in the cryptocurrency market and traditional markets like equities, explaining how they tend to react similarly during periods of market stress. Task points out that the actions of major economies like China and the European Union are influencing global market sentiments, with China's economic struggles and supply chain challenges having a notable impact.
The discussion touches upon the yield curve and its significance in providing insights into market expectations surrounding inflation and economic growth. Task emphasizes the importance of monitoring macroeconomic data and signals from key indicators like GDP numbers and interest rate adjustments in understanding market trends.
Furthermore, Task expresses skepticism towards extreme scenarios like the Federal Reserve raising interest rates drastically. He provides his perspective on the potential outcomes of Fed policies based on his analysis of economic data and market conditions.
Overall, the video provides a comprehensive overview of the factors contributing to the current state of the crypto market, underlining the interconnectedness of global economic events and market movements. Task's insights offer viewers a framework to interpret the ongoing market dynamics and make informed decisions in the face of market uncertainty.