Why this crypto market collapse is actually a good thing in the long run!
Over leveraged
Once again the crypto market is melting down, and having been in the crypto market since 2013, it really doesn't bother me. I may sound weird, but it doesn't. I am confident that in the long run, crypto (at least some crypto currencies) is the way to go. Certainly for a big part of your assets. (But always spread wisely into different assets)
Today is havoc all over the place, I even heard it on the radio in the mainstream news, which is not very usual. People are running scared to the exit, while staying calm is the only way you will get through to the other side. Because, believe me, there will be another side. There always is.
Many reasons are being named as the culprit for this crash, collapse, meltdown, etc... Like the interest rate hikes of the FED and ECB, the high inflation, the war in Ukraine, Celsius being in dark water, LUNA,... In my opinion it has something to do with it, but the main reason is "The market is over leveraged" And by that I mean, it is not about crypto anymore these days, it is all about DEFI, yield hunting, over tokenization, algorithmic stablecoins, etc... Those are all derivatives of the crypto currencies that are supposed to be backing them. But they haven't been backing them from the beginning. Most of the DEFI projects are clear inflationary projects, in which the bagholders are left with worthless coins, that are in fact backed by nothing. That is just a clear truth. @chekohler wrote a great post about this this morning. Most of DEFI is the poison that is running the market down right now. See it like this, why was Bitcoin, Ethereum, Litecoin, etc... so interesting to investors the last decade. Because of the fact that there is no inflation, no coins are being minted extra, like with the central banks. But what does DEFI do, tokenise, and create more tokens, if possible billions and trillions. That is the exact opposite of why people got attracted to Bitcoin and others in the first place.
Flush out
What is happening right now, is a good thing for the crypto market in general. All the risky and bogus projects that work on minting extra coins, or on leverage, will be completely flushed out of the markets because of this collapse. And believe me, that is a really good thing. It will bring crypto back to its essence, decentralisation and a fixed amount of coins or tokens to be minted.
That will make crypto attractive again, especially because of the fact that bargains are available on the markets right now. Sad for the people that will get flushed away by this tsunami, but they will learn from this. Trees don't grow into the sky, and they never will. Returns on DEFI of 100, 200 or 500 % are just not sustainable. They never were, and never will.
Crypto currencies itself are the important part of this market, and that is finally a fact again. So, keep an eye on it, but eventually this will pass too. And the Hodlers wil be content. The DEFI bagholders wil be pissed, but that is just part of the game. Let the dirty oil run out of the engine, and think again about what crypto currencies are all about, decentralization and a fixed nummer of coins. If that is the reality, the markets will raise again, and the trust in crypto will come back. But not before a ton of money gets flushed out of the markets.
Let's turn back to simple crypto, the sooner we do it, the better it is for the market!
Sincerely,
Pele23
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So what about HIVE? hive has inflation and its based on minting new tokens. and i think inflation is high as well. So what do you think about hive? I love this community and i want to hive last!
Oh, but the inflation on Hive is absolutely not comparable with the inflation on most Defi projects, don’t worry about that
Can Hive add possibilities in the future to spend the token on the network and burn it out? Something like the cost of advertising or facilities like that
Burning tokens don't do shit, that's a fallacy destroying any supply that is below the amount issued + no added demand is pointless it's just a marketing gimmick to get people to hold a shitcoin longer so the minters can dump on you
If they reduce the circulation. burning is effective
It doesn't, do I have to explain how math and supply and demand works or are you just going to keep beating your head against the wall holding on to fallacies?
I break it down here if you're interested in learning something
Interesting aspect you are mentioning. 👍🏻
Also not worried and actually enjoying all this as I am comfortable with what I have invested in. Earning more of those there is nothing not to like.
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Yes all the things you mention are pushing the market down, I'm talking about the war, FED, inflation, food crisis and energy crisis. Although I had not thought about leverage, I think you are right, we need to clean that out of the market and that is what is happening.
Many projects are going to disappear, which is good as you say, there is also a lot of learning to be done at the moment and for those who are new to this market, they will have a great opportunity because there is a lot of supply at the moment.
By the way I don't think this is the bottom, let's hope so, but there is still nothing encouraging in the world, to think that it can be reversed, unless the FED comes and wants to inflate the market, something I don't see happening for now, they are fighting also against cryptos.
Cheers, good article you have done, you have to keep calm, patience and think long term.
The FED isn’t quite helping the markets either, but they can not keep on raising rates. The big players on the stock market will lobby hard to stop that!
I've been saying pretty much the same about CUB. The moment it was launched people started exiting LP and moving LEO funds into CUB. It's the main reason why LEO is so low now. If the team would have instead focused on project blank, which unlike CUB has a real-life use case we would be better now.
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Fact, DeFi is so hyped it takes away the real purpose of crypto. Weird
True
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lol sadly no one’s going to listen to you, they’ve discovered fire , I can make my own money for a niche use case that isn’t even a use case and instead of building something I just fuck around with the tokens and make money for myself
Until these things fall under the SEC it won’t stop, people who believe it won’t are fooling themselves
While the L1s have big money that can lobby carve outs for themselevs in the law which is evident from the lummis shitcoin bill the rest won’t and will have to face legal action
It’s not hard for ETH or any of these EVM chains to blacklist wallets and projects it’s been done before with YSDT so the power is there just the will now
That is one view of things and I do think it's a necessary thing to do when they want to move heavily in one direction. The only issue is that I see this more of a continuation of lower prices because it's been in more of a consolidation and the economy isn't lookin great.
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Wow, in crypto since 2013, nice! This bear market has everyone worried but veterans like you know better, keep calm and let the paper hands sell cheap... We noticed you are a Defi enthusiast, so we want to invite you to check out our Yield tracking app at defireturn.app, perhaps you like how much details we provide for each pool!
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