RE: My view and analysis of CURRENT CRYPTO MARKET situation - SHORT TERM expectations
Important lessons from this:
Don't Leverage Trades. Debt doesn't hurt you in the good times, it kills you in the bad.
Also, finance is about relativity. Everything is relative to something else. Crypto is relative to the amount of fiat and fiat credit/debt that's in the system....just like any other capital asset.
Even though crypto is taking a larger market share of total global capital assets, it is still a guppie in shark infested waters (these numbers need updated, but the lesson is the same).
And the reason crypto gets knocked around so hard, is because it is only around a 2 trillion dollar market cap, in a system that is notionally worth at least 1 quadrillion dollars.
What is going to have the biggest influence on crypto, including DeFi, is how central banks influence global money supply and credit.
Even though we all think that crypto is the coolest thing since the internet...the global fractional reserve banking system has incredible influence on what direction crypto goes...both in policy and money supply.
I've been hoping to see your comment @fijimermaid :)
It's however shorter than I expect. Usually your comments are 2 pages long ;)
It's hard not to agree. I found it very tempting to use DeFi to actually get more stable coins and purchase more BTC. But I resisted this temptation. And I'm glad I did.
ps. thanks for sharing this link. I wonder what "derivatives" are. I actually never heard this term before. How strange is that ....
Appreciate your feedback buddy,
Cheers, Piotr
LOL...2 pages long...that is so funny and true.
Derivatives are assets that derive their value from some other asset or income...like mortgage-backed securities. The vast majority of derivative assets are peer-to-peer (created and traded between institutions) and not transparent.
Crypto has derivatives as well. Technically, stablecoins are derivatives..because they’re value derives from fiat value...and hopefully secured with collateral protected from volatility.