Crypto Dead or Ready to Comeback From The Dead? (Part 1 of 2)
Understanding Crypto Volatility and the Current Market Correction
Bitcoin’s and Crypto Currency’s awesome run throughout 2017 scared the hell out of banks and governments everywhere. Banks and other financial institutions got a front row seat in viewing the reality movie, “Watch How Your Control of Money Slips Away”. They saw how easily their business models, designed to serve and enrich them at the expense of the rest of the population, could crumble when digital assets outside their control took over the world. It showed governments how easily they might lose their iron-fisted control of the money supply. So like an anthill that’s been kicked, authoritarian regimes all over the world, from USA to India, rushed to crush the rise of Crypto. It caused them to use their two favorite ‘weapons of mass destruction’. Regulation & Mass Media. Regulators came out in force. The press unleashed a floodgate of articles designed to create mass fear, uncertainty and doubt (FUD) against crypto. This happened the world over. Question is, did they succeed?
We are close to the 8.5 month anniversary of the carnage in the crypto markets, since that awesome peak on December 17, 2017. Temporarily gone are our dreams of Lambos and world travel. Actions taken continuously by the “Powers That Be (PTB)” against the crypto market in general combined with the negative mass media news coverage, has made the decline even worse. Panicked investors have added to the problem. So it is time to step back, take a breath and understand what is happening. With true understanding will come peace of mind to stay aboard the crypto train, knowing the final destination is paradise, though the ride can be very uncomfortable and scary at times. I sincerely hope the facts and opinions presented below will help you stand steadfast on this incredible journey. If you are already on the crypto train, keep the faith. If not, get on now before it starts traveling too fast to hitch a ride.
Causes of the decline
The last 8 months have brought plethora of challenges back to back, that may never happen again. In other words the crypto community is taking on the challenges and coming up with answers. So let’s take a look at what the challenges are, and how they are being handled or negated.
· Several nation states have threatened and some have even made good on their threats, to impede the crypto markets. Bans on ICOs, restrictions on exchanges and even closure of some, passing new legislature designed to impede under the pretense of safeguarding the public. However even with all of these threats and actions one fact stands tall. No nation has been able to completely stop its citizens from buying, selling or trading crypto. This fact alone should speak volumes to you. To me it says “even though crypto users are less than 1% of the population, the PTBs were not able to stop us completely”. So what happens when crypto usage and adaption goes higher and gets stronger? What happens when the PTBs themselves have no choice but to join in or loose out? This is a classic case of “rock & a hard place” for them. They missed the action in the past and they want in, this time around. Come down too hard on us and they destroy the golden goose.
· The use of credit and debit cards in crypto transactions was curtailed and even disallowed. In January 2018 Visa Card dropped Wavecrest, a Visa debit and credit card issuer who provided crypto to fiat based cards to several crypto related companies. Later in time several banks, especially in the US stopped the use of crypto purchases by credit card. This has its merits. When using debt (credit cards), investors are taking a huge risk because they are not using only money they can afford to loose. Therefore in market corrections like we are experiencing now, they cannot hold on. They need to sell even at massive losses thereby causing the correction to be more severe.
· Many nations are hell bent in introducing more KYC (Know Your Customer) & SOF (Source of Funds) rules into crypto market makers. Mostly for the exchanges. Again legitimacy of this sort is necessary and good for a maturing crypto market. For people with genuine concerns that providing KYC & SOF info, exposes them to scrutiny they do not desire, don’t worry. Physical location of exchanges, subject its operators to the whims of the PTBs who run that nation. But it won’t be long before more and more exchanges become ‘decentralized peer-to-peer exchanges’. Blockchain, the technology behind crypto, makes possible trustless transactions. Therefore using the blockchain itself to foil the PTBs desire to control makes me break out in mirth.
· Banks and financial institutions that have the courage or greed to offer services to the crypto world, find themselves attacked and/or frowned on by their peers. This causes them to suddenly stop dealing with the crypto world. Many a time even businesses that decide to accept and deal with crypto are soon ostracized. These businesses, unless they are the Amazons or Paypals, soon learn that they cannot afford to loose the goodwill of their banks. Easier to do is stop accepting crypto. Again these are all knee jerk reactions by the “axis of evil”. Everytime they take such actions it forces the crypto community to come up with different solutions, and we do. Time after time.
· Then there were the infamous bans by several internet giants against all crypto ads. Thousands of businesses involved in crypto suffered due to this. Make no mistake ……… Google, Facebook, Twitter are all part and parcel of the establishment. They were willing and able to ban all crypto advertising regardless of the loss of revenue. Do you think any sane business would voluntarily hurt their own bottom line without coercion or being in bed with the PTBs? I am a Crypto Educator. FB refused to run my ads for Crypto Workshops I was conducting at the time. Appealing to them to revise their decision regarding my educational ads fell on deaf ears. Believe me the crypto world is pissed off. Someday soon blockchain projects will target these establishment cronies. I for one cannot wait.
If you are able to read between the lines regarding the above reasons that caused this major correction, you should be able to spot an underlying theme. It all boils down to the hardship endured by crypto investors and crypto service providers in changing fiat to crypto and vice versa. At present any business that aims to narrow and bridge the gap between crypto and fiat, puts themselves in an unenviable position. To do this, somehow somewhere they are going to need the cooperation of the very entities (banks and financial institutions) that are most threatened by the rise of crypto. However the more adaption and recognition that crypto receives, the less they can fight us. The good news…. we are getting there fast. Heck of a catch 22 situation for them. Keep pushing us and we will find ways to eliminate the need for you faster and faster.
Are massive corrections and volatility a bad thing?
To me the answer is a resounding “NO”. How does one make money in a completely stable and boring market? How does fresh blood in the form of new crypto investors get into the market if the price is consistently going up? For that matter how do we who are true believers, increase our crypto holdings if we are not presented with the incredible opportunities that come by due to massive corrections of this nature? My financial Guru, Doug Casey has a motto. “Buy when blood runs on the street”. Well blood was certainly running and I was and am backing up the truck to load up as much as possible.
Why is mass media so intent on causing such FUD? The way they tout it, no other investment product has ever gone thru massive corrections. No other product has this kind of volatility. What a crock! Let’s not forget that crypto is still a baby of 10 years, and as such is subject to the growing pains evident in any 10 year old. Let’s not forget that every single market from real estate to stocks, bonds and commodities also have gone thru massive corrections and losses at some point or another.
Let’s also not forget that the almighty United States Dollar did far worse in its infancy. The precursor to the current US Dollar was the Continental Currency created in 1775. By the end of 1778, Continental Currency retained only between 1⁄5 to 1⁄7 of its original face value. By 1780, Continentals were worth just 1⁄40 of their face value. Congress tried to reform the currency by removing the old bills from circulation and issuing new ones, but this met with little to no success. By May 1781, Continentals had become so worthless they ceased to circulate as money. In the 1790s, after the ratification of the United States Constitution, Continentals could be exchanged for treasury bonds at 1% of face value.
On April 2, 1792, the US Congress created the United States dollar as the country’s standard unit of money. But remember it was fully backed by gold at 1 Troy Ounce of gold per 20 dollars. Since then it reigned supreme and stable until December 23, 1913 when congress allowed the Federal Reserve to come into being and trusted them to create and control the US Dollar. Since then the almighty USD kept loosing value and trust until in 1971 Nixon took it off the gold standard thereby rapidly decreasing value even further. And today once again, just like the Continental Dollar the US Dollar retains less than 5% of the purchasing power it did in 1913.
What about volatility? Lets again look at just one instance in the history of the US Dollar. In 1985 the value of the USD dropped a stunning 32%. In one year a loss of $320 in buying power for every $1000 in savings. Take what’s currently happening in Argentina, Venezuela & Turkey and FUD about crypto becomes a joke.
So dear reader and Crypto Lover, I say ignore the soon to be foiled efforts of the PTBs. Keep faith in your belief in Crypto. Load up on crypto assets while blood is still running in the streets. Part 2 of this article will come out soon. It will give you a behind the scenes look to some of the positive things that are happening right now, that could take us well past the Trillion dollar market cap.
So hang in there friends, the game is still in play and will be for a long time.
