With all the turmoil in crypto, and world markets, the crypto revolution has been put on pause. The flagship cryptocurrency that is bitcoin has approached to within a whisker of the last 2017 bull run high. Will the support hold, or is there yet another leg down for bitcoin and crypto?
Yesterday saw the number one cryptocurrency almost get down to touch the 19,500 support level as Fed chairman Powell delivered his keenly awaited 0.75% interest rate rise, and a promise that another such rise is on the cards next month should inflation remain unchecked.
Perhaps given that the extent of the raise had already been telegraphed to markets, and consequently had already been priced in, markets across the board rallied slightly and all appeared a tadge calmer.
Bitcoin also rallied up and toyed briefly with $23,000. However, today it appears that the rot has returned and bitcoin has fallen under $21,000, down over 6% on the day so far.
So what’s next for the wondrous crypto experiment?
With at least 2 more shoes ready to drop, as Celsius calls in the restructuring lawyers, and Three Arrows Capital potentially is about to go belly up, a lot more sell pressure could return to bitcoin, and obviously bring the rest of crypto down hard.
Mainstream media has made much of the crypto downturn, and has been full of negative reports, generally with a bottom line that investors should avoid crypto like the plague.
For now at least, the libertarian threat from crypto has been averted, and it generally looks like it will take the sector a fair while to recover, especially with potentially a lot more downside on the way.
So where does this leave the average investor, who is incredibly anxious to offset the loss to their purchasing power through rising inflation?
Banks and financial companies that offer less than 1% yield are obviously not going to attract any investor with the slightest bit of common sense.
Gold and silver are certainly options that might protect wealth, but where on earth can investors buy physical metal these days? Buying the paper variety is cheaper than physical, but in these uncertain times third party risk is becoming ever greater.
Equities have also been falling as rising interest rates have their effect. In addition, not all investors are able to evaluate the geopolitical and traditional financial system risks, but things are starting to look fairly desperate in this direction and a winter of discontent might well be approaching for many nations across the world.
When all is said and done, cryptocurrencies, and bitcoin are the long term answer to a world where the fiat currency system is desperately mismanaged, and the only answer to the problem is central bank digital currencies that would enslave us all.
Yes, it may be that crypto goes down a lot lower, but out of the ashes can rise the next world currency, whether that be bitcoin, or another cryptocurrency. Whether they can flourish, or be allowed to flourish is the big question.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.