Today we’ll talk about the Macro environment and why it may not be the best time to go all in on altcoins.
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First, let me share with you Chamath’s explanation of why he believes inflation is not going away and that’s going to force the Federal Reserve to continue raising rates aggressively, which will lead to lower lows in all markets afterwards.
Chamath Palihapitiya Warns Investors To Be Careful!
But moving forward let me share with you this 90 second clip of Chamath explaining why he believes inflation is not going away and that’s going to force the Federal Reserve to continue raising rates aggressively, which will lead to lower lows in all markets afterwards. I’ll share with you my strategy, but read this:
‘I think you need to buckle your seat belt because the next three, four, or five months of CPI will probably be very bad.
Why is it that? There are a handful of components that have completely run away?
Number one, the biggest one, is rent, and so rent works on a three-month lag. We’re going to reintroduce what the true owner’s equivalent renters are into CPI, so we can already forecast that CPi going up. Oil is at $105. By now, Russia is basically trying to break the banks of Europe by now, by messing with their natural gas supplies. The German energy minister yesterday said that if that happens, it could be a contagion equivalent to Lehman Brothers with respect to energy. When you play all of these things out, what you have, unfortunately, is rampant runaway costs that really have no mechanism to get back in check in the absence of some real governmental changes. This is our policy on this Ukraine-Russia war. You know, how do we intend to sort of work, cooperate, or fight with China? All of these things have to be solved.
So, in the absence of that, prices are going to continue to go up, and so what does the Fed do? How does it throw away what little credibility, it has left when there’s 8.9% inflation prints saying “We think we’re done for right now”. You can’t do that. They will overcorrect because there is just going to be so much pressure on them to act. I think all roads lead to lower equity prices’.
Okay, do you agree with Chamath or do you disagree with Chamath, on the future of the economy and the market going forward?
My Cryptocurrency Investing Strategy For 2022 (Very Personal)
This is my strategy for what I’m doing in this market, and keep in mind that I’m not a financial advisor nor can I see the future. So, please do your own research and make your own decisions. I’m just sharing what works for me, but because of some of the fundamental metrics, like I said, I’m actively dollar cost averaging into Bitcoin. If we keep going lower, I will continue to dollar cost average in. How long do I think I will have to wait? Well, three weeks ago we took a look at Bitcoin. When this happens, we will see Bitcoin reach a new all-time high. When this happens, we looked at some of the supply versus demand fundamental factors. But because of this Macro uncertainty as well as my belief that Bitcoin dominance will continue to rise, I am focusing more on Bitcoin in 2022. I put out a poll for you in our community section: Are you buying alt coins in 2022? Almost 60% of you said yes. Almost 30% of you said no. And by the way, if you’re willing to take on more risk for yourself and also if you’re willing to wait through some potential pain, again, I ultimately don’t know what this crypto market will do tomorrow and neither do you. But I do believe whether the price of Bitcoin trends up, that’s the best case over the next several months, trends sideways, or trends down in 2022, I think Bitcoin dominance will continue to go up.
Will Celsius Go Bankrupt?
But let’s keep moving. There is news happening in this space that you should know, so always check the timestamps. But first, Celsius enlists more advisors to help with potential bankruptcy. So, according to the Wall Street Journal, Celsius is headed towards bankruptcy and they’re looking for help.
So here is the news. Celsius has hired restructuring advisors from the firm Alvarez and Marcel to help the embattled crypto lender prepare for a potential filing. If this news sounds similar to something you’ve heard, it is because the Wall Street Journal reported last week that the crypto lender had sought assistance from a different firm, this time a law firm, Akin Gump Strauss Hauer & Feld LLP, for its financial restructuring. So we haven’t got a public update from them yet, but according to WSJ, things are still happening behind the scenes.
Will Goldman Sachs Buy Celsius’s Assets?
For example, it is rumoured that Goldman Sachs is leading an investor group to buy Celsius assets. This, of course, only applies if the lender goes bankrupt. They are trying to buy on the cheap. Goldman Sachs is looking to raise $2 billion from investors to buy distressed assets from troubled crypto lender CSL. The proposed deal would allow investors to buy up Celsius assets at a potentially big discount in the event of a bankruptcy filing.
This isn’t confirmed yet. Goldman Sachs only appears to be gauging interest as well as soliciting commitments from Web3 crypto funds specializing in distressed assets and traditional financial institutions with ample cash on hand. So we will see, for the $2 billion that it is speculated that Goldman Sachs is trying to raise, it is speculated that Selsius does have over $8 billion lent out to clients as well as $12 billion in assets under management as of May. So we will see how this plays out.
Compound & Aave Going Strong
Now, for some perspective and a potential silver lining in all this, if there is a silver lining, it is the decentralization of at least the blue chips. The decentralized lending and crypto lending platforms are still working fine. It’s the KYC centralized finance lenders in crypto that are stressed right now. Aave is just fine. The Compound is just fine. Liquity is just fine. So basically, what that means to you is that all the KYC and consumer protection regulation in the world was no match for open source transparent protocols. So some food for thought, and by the way, just to paint the full picture, many DeFi lenders, like the small lower cap highly speculative ones, DeFi protocols have failed, the blue chips remain unfazed.
SAND Metaverse Gains 20% After META Announcement
And by the way, it’s not to say that we won’t see some pumps in some altcoins even in bear markets. For example, SAND gained almost 20% in the Wake of the Tech Giant’s Metaverse Announcement. The Sandbox COO said again on Saturday that an acquisition by Meta will never happen.
So there are two things to unpack. First off, what was this big announcement? Microsoft announced the formation of something called the Metaverse Standards Forum. The stated goal of the Metaverse Standards Forum, which was announced on Tuesday and, by the way, also includes Alibaba and Sony, is to foster coordination and cooperation among the hundreds of companies working to establish themselves in whatever the metaverse becomes. So these tech giants are teaming up to keep the lines of communication open because they don’t want to lose control. Messari asked, “Wouldn’t Meta purchasing a virtual world like the Sandbox Game makes you bullish?” If one of these centralized juggernauts bought out one of these decentralized metaverses. Well, the COO of the Sandbox confirmed this will never happen. I like that because we’re fighting for a decentralized future to get away from some of the corruption and stealing of data from these Big Tech Giants.
[This article is a transcription of a video made by Altcoin Daily]
Original video: https://youtu.be/P0eRJQhXRRw]