The markets tire of their own pessimism. So, from time to time, they take a break to sit and doubt their tragedy. Are we exaggerating? Suddenly things aren’t so bad. At this time, no one in their right mind dares to decree a flat. However, that’s not to say that waves of optimism can’t come and go from time to time. What worries most now are the expectations. Because expectations often become self-fulfilling prophecies. well we know that sentiments dominate the markets.
If the inflation problem is caused in large part by a “supply shock,” a withdrawal of liquidity is only a partial solution. Certainly, demand can be reduced with a change in monetary policy, but not everything is rosy. In conditions like the current one, with so many failures in the distribution and production chains, a reduction in demand normally means a reduction in growth. It is quite possible that the cost we have to pay to lower prices is that of a recession.
Fear makes us more talkative. The investor seeks to protect himself by placing his money in safe and stable assets. In other words, risk and volatility are avoided. In such conditions, Bitcoin and cryptocurrencies suffer more than other assets, because they are more volatile assets than other assets. Although many are currently in the denial phase, it is not very difficult to open your eyes. The evidence for this argument lies in the behavior of prices.
What is the problem? After all, there is nothing that time will not heal. All we need to do is wait for prices to recover. This is true for many. But I am afraid that is not true for everyone. The problem is debt.. Babel Finance, Celsius, Third Arrow Capital, and Hoo are the first to feel the cold of winter due to not being well dressed. In a capitulation, not everyone sells willingly. In most cases, it is sold by obligation in order to pay off debts. One thing could lead to another due to the interconnection of debt and collateral between the different platforms. The price of Bitcoin, in fact, may continue to drop causing more pain. It is still too early to rule out the possibility of a longer, colder and more painful winter than anticipated.
Now, let’s talk, with a critical eye, about the most important crypto news of the week.
The SEC reportedly launched an investigation into insider trading on exchanges
Unregulated markets are not always the oases of freedom that many advocate. In many cases, they are places for a few to take advantage of the rest. It is true that bad regulation can stifle innovation, growth and competition. But it is also true that extreme debauchery can do a lot of harm to a group thanks to manipulation, fraud and lack of transparency. Sooner or later, users end up demanding fairer conditions.
It is not easy to obtain the balance between freedom and justice. The temptation has always been to go to one extreme or the other. Competition without clear rules ends in savagery. A rigid and forced bureaucracy kills growth. The healthiest thing is a sensible agreement.
Nayib Bukele, the president of El Salvador, tells his citizens: “patience will be key”
Patience is key. But common sense is also key. El Salvador is a country up to its neck in debt. Your country risk continues to rise. And its bonds are not very well seen in international markets. Bukele, despite the great support he receives from his compatriots, does not inspire much confidence among his creditors. Which is not very convenient for a country that depends heavily on foreign financing.
We must remember that these are public funds. However, very little is known about the investments made. There is not much transparency. Thanks to Bukele’s Twitter account, we know of certain Bitcoin purchase announcements. But nothing official. We know that you bought quite expensive in full bullish boom. And, doing the math, you don’t have to be a genius to know that those investments are now in the red. Bukele bought like crazy. There was not much debate or study there. Those purchases were made in hot blood. Now what El Salvador’s creditors fear is a default on payments. Well, let’s hope these are unfounded concerns.
Spanish Data Protection Agency warns about privacy issues in the metaverse
The news is old, but the concern is not. Privacy is a recurring theme. Which reminds us that increased scrutiny from regulators could directly affect the business model of many of those involved.
Panama President Rejects Cryptocurrency Bill Due To FATF Guidelines
Panama is not El Salvador. Panama as a country understands very well that reputation matters a lot. In the same way, its success is directly related to faithful compliance with international regulations. That confidence usually translates into investments. That project, in particular, was rejected. However, surely,A new project will emerge in the future. Panamanians know perfectly well that innovation is essential to maintain the competitiveness of their banks. In other words, the battle was lost, but not the war.
Uphold informs its users in Venezuela of its withdrawal from the country due to sanctions
Sadly, Uphold is withdrawing from Venezuela due to US sanctions. Now, we cannot say that it is a tragedy, because Venezuelans are already used to this type of setback. Also, Uphold is not the only option. Alternatives still exist. In Venezuela, there is a lot of reliance on P2P platforms like Localbitcoins and Binance P2P. This happens because it is not easy to move money through official channels. Foreign exchange restrictions drive the volume of transactions in Venezuela. Shippers, merchants, and money changers rely heavily on P2P markets.
In Venezuela, there are many convenience users. This means that many people use the technology for its versatility in eliminating friction. In the context of the Venezuelan reality, Bitcoin is an ally of the dollar. The closure of Uphold in Venezuela is an annoyance for many. But those deposits will be captured by other portfolios that are available in the country. I mean, goodbye Uphold, go with God, you will be missed, but life goes on.
Disclaimer: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein 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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