Quite a volatile week due to the nervousness of investors. The pessimism triggered by the default on dollar bonds of Chinese real estate giant Evergrande has hurt all markets. Many fear that this could be the start of a much bigger credit crunch. That said, Evergrande could become something of a Lehman Brothers in 2018. The current debate focuses on this possibility. It is possible that it was actually an isolated incident and that it did not happen to the majors. The fear, however, is that a probable Evergrande bankruptcy will cause a ripple effect.
FUD or wise caution? The truth is that when in doubt, many capital cities have decided to take refuge in the dollar. The panic spread over several days, causing falls far and wide. And the tentative recoveries of the past few days are still very weak. All of this happens in the midst of a macroeconomic situation that is sending out mixed signals, a pandemic that is still going on, a rather complicated geopolitics, a logistical crisis due to failures in the production and distribution chains and the monetary authorities being forced to reduce stimuli economic Avoid overheating.
Meanwhile in the crypto room China hit the headlines again by banning all cryptocurrency-related activities. Of course it’s something old. But due to the current nervousness, it comes with a heavy blow. Markets need time to process everything that happens. During times of stress, investors tend to overdo it. However, there is no evil that lasts forever. Sooner or later we will adjust and optimism will return.
Now let’s talk about the week’s most popular crypto news.
The NFT market is a sign of the exuberance of this bull cycle. Obviously, this boom is a result of greed and speculation. It is normal. New and small projects have the potential to grow quickly due to low liquidity. As a result, the few investors who benefit from such projects are viewed as “geniuses”. of high finance. His adventure was happy because of the fashion. But a sharp rise in prices is not necessarily a sign of success. In most cases this is a sign of bankruptcy.
Of course, this does not mean that a fall, the product of a general panic, means the death of an emerging market. Nor does it mean the end of the bull cycle. People tend to regain hope with relative ease. In my humble opinion, the NFT market will persist. That’s not to say that all NFTs are valuable. But in all honesty, I very much doubt that one setback will be enough to determine his death.
Layer 2 solutions are always used to emphasize the irrelevance of altcoins. I personally prefer this vision. I mean building things on bitcoin. But one is what you want and the other is what reality shows us. Those defending the great potential of Bitcoin’s Layer 2 solutions often forget to mention Ethereum’s success. Ignoring the multitude of existing projects running on the Ethereum network is an act of extreme denial.
The bitcoiner tends to be extremely conservative. Maxis, in particular, take their politics to extremes. They are the crypto twitter growls. And they are the self-appointed guardians of the faith. Apparently the only option is to keep Bitcoin in a cold wallet under the mattress. Everything else is heresy. If PayPal wants to accept Bitcoin, that’s a bad idea. If a bank wants to open a bitcoin fund, that’s a bad idea. If I want to store my BTC on an exchange, that’s a bad idea too. In short, fanaticism is obscurantism. Dogmas are fatal for innovations. Innovation requires opening the mind. And there are too many dull bitcoins out there.
We know very well that all crypto assets are very volatile. An asset that increases several X in a few days is logically a high risk asset. Which means it is prone to dramatic slumps. However, as if by magic, many investors in this area are unaware of this phenomenon. The ascents are interpreted as an eternal blessing from heaven. If someone speaks of a possible doom, they will be dismissed as an idiot. It is the realm of illusory thinking. Exactly. Many live with their investments in the land of the imagination. False expectations are aroused and then comes the blow.
The reverse process takes place in the event of a fall. A tragic decline is not interpreted as a volatility effect. It is interpreted as “???? Death”???? of the asset. From the eternal ascent we went to our death within a few days. Naivety is definitely a difficult disease to cure. What do you expect from such an illiquid market? Stability?
Mining is a slightly more complex business than simple investments. You can win more, but you can also lose more. There are more variables to consider. It requires more skill and technique. And luck cannot be missing. The novice is attracted to the miner by the idea of getting a steady income. However, this story doesn’t always have a happy ending.
Over time, the little miner seems to be crushed by the big miner. Home mining seems to be a thing of the past if we follow the trend. However, this is not possible in a bull cycle. Optimism makes everything possible.
Earning money playing games was the dream of many. It has always been possible, but now, as with the NFTs, it is more possible than ever. As with many things in this area, the trick is to get there first. The former takes the greatest risks, but achieves the highest returns if successful.
The first challenge in these games will be competition. When the market is saturated, the profitability of any game will be less. Too many tokens in circulation are not good for the market. But I’m afraid it is inevitable. Nobody can stop the spread of games. Moral: Those who arrive early have better chances of winning than those who come later.