Tuesday, July 27, 2021

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    George Soros going bankrupt to Bitcoin, lack of liquidity in the crypto-market, large accumulation of BTC and much more

    During the week, markets have been dominated by fairly mixed behavior. It’s corporate reporting season on Wall Street. And banks, in particular, have recorded significant growth. Which comforts. A recovery was expected today due to the increase in U.S. retail sales. nevertheless the big concern remains inflation and employment. The logistical crisis continues to wreak havoc and everything is moving slower than expected.

    Everything indicates that the oil-producing countries do not intend to increase production for the time being in order to take advantage of high prices. care! Because if this lasts for too long, it can complicate the situation. They can kill demand, thus accelerating the shift to electric vehicles. Is inflation transitory? When will the Federal Reserve raise rates?  Investors tolerate risk better than uncertainty. At this stage of cautious optimism, capital is temporarily ignoring the growth sector.

    Meanwhile, Bitcoin is reluctant to break its $30K support. The bears keep up the pressure, but the bulls have achieved the miracle of resisting. Things are not very sweet, because the thing in China still seems to be ant-colored. However, smart money in the United States is serving as a counterweight. Altcoins have fallen hard. However, there is no reason to believe that this situation is permanent.

    Now, we’re talking about this week’s most popular cryptonews.

    I must confess that I am not an expert on this particular metric. It seems to have worked very well in the past. However, I don’t know if the metric right now is considering exceptional events in China. I would say the metric was forged in normal situations. One could then speculate that distortions in hashrate resulting from setbacks in China might be sending out signals that are very easy to misunderstand. I do not know.

    However, it is quite possible that the result will end up being the same. It is no surprise that many indicators on these monuments are located in the shopping area. The current price looks very attractive. Although we could still have another capitulation, the opportunity to buy is undeniable. Bitcoin is an extremely volatile asset. But the risk/return ratio is too interesting to ignore for long. The mood in the market at the moment remains very conservatively optimistic. However, time must be given. Everything changes. And nothing lasts forever. Sooner or later, the appetite for risk will return.

    I wrote this article as a hypothetical approach. I wanted to show what a “bankruptcy” means in the “normal” world in contrast to the Bitcoin world. In other words, a fall of more than 6% was a collapse in the case of sterling in 1992. But capitulation above 50% is not the end of the world for our temperamental market. However, Fiat remains the riskiest asset for the most passionate. It could be said that the lover does not listen to reasons.

    The price of cryptocurrencies is extremely unstable. Speculative activity is quite high. And many live off trading. Major exchanges offer margin positions. And leverages of 5X or more. In other words, there are no barefoot nuns here.

    Now, the hatred that Soros unleashes is incredible. I was quite surprised by the popularity of this article. The reaction was overwhelming. Disqualifications, insults and regrets. But very little sustenance. I know George Soros is a controversial character. I wrote about it for that very reason. In addition I find the events of Black Wednesday of ’92 very interesting. A definite worthwhile analysis. Especially since it is now investing in this space.

    No one denies the importance of a commodity. Food in particular has always had great economic value. It is no mystery that items with intrinsic value also have monetary value. Coffee, soy, orange juice, cocoa, and sugar are very dynamic markets and attract many investors. I wouldn’t be surprised if organic foods have a lot of revelation in the future. Of course they could offer a lot of economic return.

    However, it has already been proposed that organic foods should beertirán in the gold of the future is an exaggeration. He did not rule out the fact that they could become a very important commodity. That’s not the exaggeration. In any case, exaggeration is totalitarian aspiration. I mean the idea of a single ring governing everything. The future will most likely be more diverse. Fiat, metals, goods and cryptoassets, etc. In such a diverse world, I doubt very much the success of absolute solutions.

    The discovery of warm water! Of course Bitcoin is a low liquidity market. That is the reason for its great volatility. In this sense, Bitcoin is not the “digital gold”. It is a speculative asset like gold. But it’s not exactly the same as gold because of its instability. That is, because of its high risk/volatility. This implies that two assets with such dissimilar properties hardly play the same role in a balanced portfolio. In any case, you could say that Bitcoin is the “digital copper”.

    In fact, the main attraction of Bitcoin is precisely that it is not like gold. Large capitals do not seek “safe haven” in Bitcoin. That’s what they have the dollar, Treasury bonds or gold for. What you’re really looking for with Bitcoin is growth/opportunity. What’s interesting here is bitcoin’s risk/performance ratio in the context of a low-correlation market. This is made possible largely by its low liquidity. That to top it off is not concentrated in one place, but is distributed in many exchanges. Now, here’s a spoiler. As we grow in liquidity, we will decrease in returns (see law of diminishing returns). In this case, Bitcoin itself will eventually look much more like gold. Liquid, relatively stable, but increasingly boring.

    Well, this headline sums it all up. This is where we are. On the tightrope. We expect a further fall or a rebound. At least as far as today is concerned, widespread optimism is expected from positive reports of retail sales in the United States. Let’s hope Bitcoin gets infected with this energy.

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