What my last week looked like
Flu meant for me that I don't look at anything, that I'm are not aware of the latest developments. In short, I was happy to keep track of my own things to the extent necessary, and besides that, I've spent as much time in bed as possible.
That's how my last week looked like. Saturday morning I woke up and immediately felt that I was not feeling well, during the day this became more and more clear until I wanted to start the BRO Newspaper with fever shivers in the middle of the afternoon. At that moment, my partner stepped in and told me plainly… You let them know that you are sick, and then you go to bed. Thus, it happened. Sometimes I do listen to good advice.
And now I still don't feel 100% but ... I also had to go to the dentist yesterday, so I decided that I could show a little more interest in the crypto world that I have completely ignored in recent days. Except for some minor things, of course. There are things that you continue to do even when you are sick.
But musing about the crypto market, that is something I just had to do. All I have to do is read some news. Take a look at crypto prices, and you will see fairly quickly that not much has changed. And that certainly nothing has improved.
Not fun ... But reality.
We are still in the bear market. And what I'm about to say won't be fun at all for a lot of people. Now I'm talking about the people who don't understand how it works because they refuse to do even the slightest bit of research on what they are investing in. The people who think that crypto can always keep printing and never go down, while they themselves are only selling in large quantities at once. The people who don't seem to understand the principle of supply and demand. And the people who are overinvested with money they can't afford to do without. I have bad news for those people.
Bad news, the bulls won't come back anytime soon!
It will probably be a long time before the bulls can chase the bears away again. An important thing for financial markets to get going, to chase the bulls over the track and to keep prices rising are LOW INTERESTS. Oops! That won't happen for a while...
Inflation is soaring
Inflation in the US is officially still around 8.3% and should be reduced to 2%. To achieve that, the FED is raising interest rates, and it is expected that interest rates will need to reach around 4.5% before inflation moves back towards 2%. And that could take a while, unfortunately. Another thing you see with high interest rates is the threat of a recession. And well, a recession is definitely not the best you can get, so we're balancing on a very thin line here.
The FED wants to get inflation under control at all costs. A recession is looming, which will bring many harrowing stories. Poor gets poorer and rich gets richer. Does it ever work differently?
But what it means for the price of Bitcoin is that we probably will be going to see even deeper bottoms. And as we now know, with Bitcoin, of course, the entire crypto market falls along with Bitcoin. So no bulls for now. History shows that to bring inflation down quickly, we need the dreaded and hated recession. And from the peak of inflation to the return to the desired 2%, it took an average of 16.2 months. From this, you can conclude that the US is at least on the way back to getting inflation under control. At the peak, the inflation was 9% according to official sources.
Also, history tells us that there have only been 3 periods of inflation that even dared to approach the 9% of today. The bad news is that this high inflation took an average of 22 months to get back to 2%… And then there's the fact that what we're dealing with today is a pretty unique situation. It can be said with certainty that past results are absolutely no guarantee for the future.
Go into hibernation with the bulls!
And let's not even start to talk about Europe, because there it rises far above 9%. In The Netherlands, for example, we had a staggering 17% inflation last month. Unfortunately, there is no prospect of a fall in inflation for the time being. Long live the European regulators. Energy becomes unaffordable. Warmth in your home that you have been used to all your life is suddenly a luxury that not even everyone can afford themselves anymore. It's going to be a cold winter for many people here. But, we're going towards the winter. Maybe we can all just go into hibernation and wake up when it is spring again?
Financial markets don't thrive on high interest rates
Okay, back to what I said. Since the recession is not here yet, inflation is still far too high everywhere, so interest rates will gradually be raised further and further, it is just actually a bad time ahead for the financial markets. They don't thrive on high interest rates. On the contrary!
So who hopes for a quick turnaround, a quick change from bear to bull… Alas! Bad news. This is likely to last until 2024. And depending on macroeconomic conditions at the time, it could take even longer. While some people still had hope that this bear market would not surpass the previous one, it could just be different.
Always keep in mind that I am absolutely not a financial advisor! And I can be hugely wrong. I'm just musing a little. What you read is purely my train of thought where I try to combine things. Stuff that I learned in a very distant past and the situation as it is now. Maybe I shouldn't! But I better be prepared, right?
Some positive thoughts
Now, I actually don't like to look at things negatively. Negativity abounds, in the news every day, all you have to do is look around you, and you'll see it. So I'm trying to find positives anyway. Are there any?
Well, sure! If you always wanted to buy Bitcoin but never could because it was too expensive, perhaps here's your chance. Bitcoin is expected to take another dip, we'll see if it happens. My name is not Nostradamus, but given the situation around the world, it wouldn't be very strange if it happened.
Other than that, even in this situation, you can still earn in crypto. Take Hive as an example. The lower the dollar value of Hive goes, the more Hive you earn for your blog! Eventually the bulls will come back again, and then you'll be very grateful to yourself if you stuck around now.
Wasn't it once a slogan, "I came for the money and stayed for the community". There's all the time in the world to prove it now!
I can find other positive points, by the way, but they do not have much to do with crypto, and therefore do not fit into these musings. I assume you can think of those yourself.
The last thing I want to say is: THIS WILL ALSO PASS. Hang in there, keep your faith, do your research and invest in a team! Teams that keep going full steam ahead during this time... those are the teams you can build on! And always remind yourself to: