During the last week of last year, we already knew that 2022 would not be as good a year as the previous two years. A relatively good year was expected, but not so good. However, 2022 surprised us. In fact, We haven’t had such a bad year since 2008. Now, let’s hope for a bad 2023, but not as bad as the year that is leaving. I am referring specifically to the fall of the S&P 500, Dow Jones, Nasdaq and Bitcoin.
There was no Santa Rally. And today, during the last Friday of the year, the tone is pessimistic. The expectations are not very optimistic, because the forecasts are not very encouraging. Investors are not taking much risk. They are acting very cautiously, because the next few months promise a lot of volatility and uncertainty. The refuge is stability. The big winner has been the dollar. And the first victims of the situation have been big tech and crypto.
Inflation and the measures taken by central banks to combat it are the two main protagonists of this story.. High demand and low supply lead to an increase in prices. This, in turn, forces the authorities responsible for monetary policy (central banks) to withdraw liquidity from the system to reduce demand. In this way, restore balance.
However, the end of cheap money has an effect on valuations. This monetary tightening policy slows down the economy. Therein lies the danger. A recession could be the necessary evil required to lower inflation. However, a recession is a recession. Pain is pain. “Recession” means lower incomes, more unemployment, and lower growth. Which of course also hurts valuations. Here are the concerns of investors around the coming year.
What does this mean for the cryptocurrency investor? It could mean that the bottom has not yet arrived. And it could mean that this bearish period will be longer and more complicated than the previous ones. In such exceptional times, it is not very foolish to expect exceptional behavior. Like it or not, in the world of investing, expectations have a lot of power. That is, the market tends to fulfill its own prophecies.
Many contrarians assume that every fall is a buying opportunity. And all pessimism is reason for optimism. But that’s the most naive way to be a contrarian. Let’s see the volume. Whales sell. And the retailers buy. Retailer optimism during a downturn is not always a good omen. eye!
Now, let’s talk about the top crypto news of the week according to Cointelegraph in Spanish. This is not a news summary. This is an opinion article. The intention is to reflect on the following headlines in a skeptical and critical way. This is an article for free thinkers.
Sam Bankman-Fried could plead guilty next week before New York federal judge Lewis Kaplan
All those responsible for the collapse of FTX should pay for all their crimes. As simple as that. Who are they? What crimes did they commit? Well, that’s a matter for the courts. What one demands in this case is truth, justice and reparations. What one least wants is a theater. For those reasons, I dislike the latest Sam Bankman-Fried interviews so much. The victim role suits him very badly.
The plea of guilty could be the result of a negotiation with the prosecution. We hope that the judge will not be too lenient with the punishment. A fraud of this size demands a proportionate punishment. The man has to pay for his crimes.
MicroStrategy Increases Its Bitcoin Stake Despite Heavy Losses
Michael Saylor is the perfect example of what not to do as an investor. I’m late. She bought expensive. And he got into debt. To add insult to injury, he took on a pseudo-religious attitude about it. Is he the CEO of MicroStategy or the leader of a cult?
Michael Saylor has become the poster boy of bitcoin fanaticism. I mean the idiosyncratic bitcoiner obsessed with libertarian utopia. Frankly, I wouldn’t want to be a MicroStrategy shareholder right now. If the CEO of a company loses money in the billions and doesn’t see it as a problem, the problem is the CEO. When, in the investment world, ideology is placed above profit, there we have a problem.
Dogecoin survived the carnage of 2022 better than most
Elon Musk and Twitter. A promise has the power to keep the illusion alive. The possibility opens a door. And a door attracts demand. Unlike other projects, Dogecoin offers (at this time) a promise to its community.
Will Dogecoin be the official currency of Twitter? We do not know. But there is the possibility. And that’s enough. In fact, the ambiguity of the promise is what makes it so powerful. Because it leaves us room for rumor and imagination. Speculation is like that. The expectation is nurtured.
Mark Cuban to Bill Maher: “If you have gold, you are very dumb… Get Bitcoin”
It doesn’t take a genius to know that the phrase has been made to create controversy. In this way, get media attention. And indeed, we are talking about it here. The technique definitely works.
Is bitcoin better than gold? We would have to define the criteria used. Better at what? I assure you that, for a circuit manufacturer, for example, the physical properties of gold cover certain needs better than the other options. I assure you that for the jewelry industry, gold still has its uses. And I assure you that in the case of some portfolios, gold fulfills a specific utility. Suddenly, it brings stability. Suddenly, it is an ideal instrument as collateral in case of leverage. Is the hammer better than the saw?
The price of the dollar soars in the parallel market of Argentina
In countries with many currency restrictions and large public spending, the month of December usually brings huge rises in the parallel currency market. Therefore, a lot of volume is generated in the p2p cryptocurrency market. Venezuela and Argentina present a positive correlation in this sense.
Monetary instability encourages the need to seek monetary stability in another instrument. In the face of instability, people do not look for scarcity. They seek stability. Of course, this stability is never absolute. Usually it is relative stability. In this case, it is the stability of the dollar.
Faced with official restrictions, people seek solutions through unofficial channels. In this case, p2p cryptocurrency markets are offered as a bridge. There is no rivalry. In practice, it is a complicity.
Disclaimer: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
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