The cryptocurrency market is getting drained right now as we are literally watching a sea of red. I want to talk about what this means for you as a crypto holder. Just to be clear, we’re not going to talk about why the cryptocurrency market is crashing.
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The Crypto Market Enters EXTREME FEAR
As of this weekend, the crypto market has just entered extreme fear for the first time in months. What does this mean and how can we use this as investors in the crypto market? Well, the crypto market’s behaviour is very emotional, meaning that crypto investors often act very emotionally.
‘People often tend to get greedy when the market is rising, which results in a fear of missing out. People often sell their coins in an irrational reaction to seeing red numbers. With our Fear and Greed Index, we try and save you from your own emotional overreactions. With our Fear and Greed Index, we try and save you from your own emotional overreactions.’ – the website said.
Do you get what they’re saying here? They’re saying when the market is close to its top, that’s when people get greedy. When markets are approaching bottoms on the way down, people become fearful and begin selling. That’s how you go broke. In reality, this is what smart investors do. In fact, this is what Warren Buffett says all the time: ‘Be greedy when others are fearful. Be fearful when others are greedy.’ That’s when you should buy when the market’s on the way down and when everybody else is greedy. As the markets are going up, extreme fear like right now can be a sign that investors are too worried. This could be a buying opportunity when investors are getting greedy. That means the market is due for a correction.
That’s not to say that Bitcoin tomorrow can’t dump another significant percent. I don’t know what the Bitcoin price will do tomorrow, and neither do you. Nobody can see the future, but metrics like this for me at least signal that we’re much closer to finding a bottom than we are to a top.
Is This the Buying Opportunity of a Lifetime?
Next up, let me throw a perspective like this at you. This crypto market crash is probably the best opportunity that can happen in your lifetime if you’re not a 70+ year old boomer. I would even say that a 70+ year old is young if you have a young mindset. The point is that all these people are depressed right now because the market is down. I understand them, but for me, a crypto market crash is probably the best thing that could happen in my lifetime. The bull market is what makes you money. The bear market is what makes you generationally wealthy. And by the way, that’s not to say that 90% of these altcoin projects won’t fail. I think most of the altcoin projects will fail, but Bitcoin, Ethereum, these quality crypto projects that we’re seeing the growth in or seeing the building and the users come in, those are the opportunities. Currently, 3.9% of the world’s population owns cryptocurrency. Imagine when we hit 50% and it’s not going to be easy. If it were easy, then there wouldn’t be an opportunity.
Willy Woo Reveals His “We Are Still Early” Chart
We are early if you’re willing to have longer time preferences. It’s one thing to say it, but here’s a chart from analyst Willy Woo to prove it:
Here is the price performance of Bitcoin. The rolling for your growth of Bitcoin versus every other asset class, and you can see that it’s not even close. Even though Bitcoin has had diminishing returns, it has outpaced every other asset if you’re willing to hold it for at least four years. So if you bought in 2020 or 2021, you still have three to three more years to hold it. I’m sorry, those are the rules. Looking forward, when the blue trace that’s bitcoin’s performance moves into the cluster of the other assets, bitcoin will have matured. You can see right here that Bitcoin is getting close. This tells me that because of diminishing returns, we probably only have one to two more big bull cycles left before Bitcoin truly reaches mass adoption and we reach peak maturity. I don’t know, what you think? I truly would love to hear your take on all this. Two more cycles are left. Are you willing to huddle through the down times? You tell me now.
Terra Luna SELLING Bitcoin to Support UST Stablecoin
Do not forget to take advantage of the next piece of news involving Terra Luna and BTC. A continuation from our story yesterday, the Terra Luna Foundation Guard loans 1.5 billion dollars in Bitcoin to their stablecoin USD to protect the stablecoin. So drastic times call for drastic measures. The organization’s council, meaning the Luna Foundation Guard, voted to lend out 750 million dollars in Bitcoin from its reserves and another 750 million dollars in Terra USD, their stablecoin, to keep the latter asset pegged to a dollar. So, as we shared with you yesterday, the USD lost its peg to a dollar. It is an algorithmic stablecoin, and the company behind it is now centralized. The organisation made a loan to an unnamed professional market maker to help keep the peg. The loan has been made in light of the unit’s briefly falling below its dollar peg amid extreme volatility in the crypto markets.
By the way, this does mean they will be selling some of their bitcoin reserves to help keep the peg to USD. Here is an exact tweet from Do Kwan:
They’ll buy more bitcoin if it goes above. They’ll sell their bitcoin if it goes below. It’s all to strengthen their stablecoin. Just FYI, this is what’s happening in the market. And by the way, this was the exact reason that Terra Luna bought so much bitcoin in the first place: for things like this.
Japanese E-Commerce Sight Adopts XRP
Next up, some adoption news for XRP in Bitcoin. A major Japanese e-commerce site adopts BTC and XRP payments for used cars. The development marks the first time XRP digital currency will be used on a cross-border Japanese e-commerce site, so here are the details:
‘SBI Motor Japan, a subsidiary of SBI Africa Company, has announced that its customers can now make payments for used cars using bitcoin and XRP.’
If you buy out a country, they’re saying these are the cryptos we will accept and we’d love to have you pay through them.
‘According to the announcement by SBI on Monday, the development marks the first time XRP cryptocurrency will be deployed on a cross-border e-commerce website in Japan. The BTC and XRP transactions will be settled on the SBI VC Trade company, a cryptocurrency exchange owned by the SBI Group.’
What this means for you if you’re a holder is just a little bit more use on each network:
‘According to the announcement, the move stems from the growing demand for cryptocurrencies in developing countries, particularly in Africa, where people still lack access to basic financial services.’
All those people who now just have to have a cell phone can have access to Bitcoin XRP and can start doing e-commerce if they’re buying from Japan.
S&P Global Gives Compound (COMP) a B-Rating
The next piece of historic news for the DeFi altcoin compound is that the enterprise arm receives an S&P credit rating in a DeFi first, so the iffy B- grade applies to the Compound Treasury, a platform promising a 4% yield for USDC denominated business accounts. So the heavily respected S&P and they are heavily respected in the traditional world, gave the compound a B-, and that’s actually not that bad. It’s pretty historic for them to validate a compound like that based on S&P global ratings.
‘The arbiter of credit worthiness slapped Compound Treasury (a product of compound prime LLC), indicating that the USDC-powered yield platform is speculative but currently has the capacity to meet financial commitments.’
The outlook is stable, says the S&P about Compound Prime. So why is this historic? Despite the poor marks, the compound heralded the rating as a DeFi first. It appears to be the first time an institutional DeFi product, meaning compounds, has been scored by one of the major credit ratings agencies. In a direct quote from Compound:
‘This signals tremendous progress in the crypto industry’s maturity as traditional institutions begin to judge the risks of digital asset-powered financial offerings. What is really interesting and important about this is that it really does show that DeFi can be measured, weighed, and incorporated into more traditional financial risk methodologies and, additionally, also understood by traditional finance.’
I think this is cool. I do think this is a win for compound because it does show that traditional entities are giving some sort of validation to these DeFi protocols. That’s bullish.
[This article is a transcription of a video made by Altcoin Daily]
Original video: https://youtu.be/VDD_kcSQZpw ]