SVET Markets Update (19 May 2022)

SVET Is the Light, by Svet and Victor

The present situation with US markets is not motivational to investments across all assets categories, including cryptocurrencies.

Macro factors, such as war-induced supply-chain disruptions and Chinese major cities’ nightmarish lock-downs, continue to push up prices of oil as well as of some other major consumer goods, including those of cars and building materials.

US dollar devaluation is getting out of US bureaucrats’ control, which is unacceptable to DEM party establishment in view of the November midterm elections (all 435 seats in the House of Representatives and 35 of the 100 seats in the Senate will be contested).

At the same time, as the latest consumers’ sentiments and corporate reports demonstrate, US economy is plunging into the prolonged recession with an unprecedented speed. Accordingly, we might assume that a continuation of the current, detrimental for businesses and investments FED policy depends on two eventualities.

First, on a possibility that, either the war stops (or at least notably relents, allowing belligerent countries’ economies to achieve some ‘new equilibrium’) or Chinese ‘apparatchiks’ release citizens from under the indefinite house arrest. Still, after it happens (if it happens), we have to wait at least 3–4 months to see economic indicators improving and US bureaucrats reacting on this.

Second, on a contingence that during the next two quarters (or so) US economy deteriorates to the point when unemployment rate shifts drastically up (from the current 3.6 percent to, at least, 5 or even 7 percent) and DEM politicians start to worry about their core constituencies casting votes to GOP in mass, as they did in 2016.

Also, if US stock indexes break records on a bear-side (for example, S&P sliding to 3k) while corporate reports continue to signal that US end-consumers stiffen their budgets, major US corporations stockholders confronted by an unprecedented business reduction and a debt crisis, might start to actively pressure Washington administrators into reverting their ruinous monetary policies.

In either cases US (and the world’s) economy is now facing the prolonged ‘gloom-and-doom’ period, which might last 6 months or more.

Obviously, this deplorable state of world’s affairs can not reflect positively on the crypto market, which capitalization has already shrunk to about 1.2 trillion, wiping out almost all gains from 2020–21 bull market.

Moreover, most technical indicators signal that we are far from reaching the bottom of this dark hole (which, IMHO, lays at the 18–14k BTC levels). Additionally, we now have to brace ourselves for the massive, world-wide regulatory assault on DeFi, which might cause a complete shutting down of several major platforms.

Overall, staying out of crypto all together for a period of at least 6 months is not such a bad idea, specially, for newbies, which years of experience with our crazy industry counts only from 2020.

All entrepreneurs and founders are entering into a challenging period of their lives when they are no longer supported by macro-economic and political factors and when they are not unequivocally endorsed by mass-medias, which main focus shifts from facilitating consumer spending behavior towards helping aging bureaucrats to keep their weakening grip on the power.

If that dark period lasts long-enough, how can we find profit opportunities defied by such unparalleled trials? That, of course, is impossible to answer without taking in all details of local economies as well as of personal situations and talents.

However, the world economic history as well as our own life-experiences teach us that opportunities present itself to anyone who seeks its with vigor and with no fear.

For more, please, visit: https://svetrating.com/

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