Cryptocurrency for Beginners: with Crypto Casey

Trillions on the Sideline! (Dip or Moon?) - Last Week Crypto

August 22, 2021 Crypto Casey Season 2021 Episode 33
Cryptocurrency for Beginners: with Crypto Casey
Trillions on the Sideline! (Dip or Moon?) - Last Week Crypto
Show Notes Transcript Chapter Markers

This is another episode of a weekly cryptocurrency news series called Last Week Crypto.

We cover the latest global news stories affecting the cryptocurrency markets August 15th through the 21st.


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======== VIDEO SUMMARY ========

This week we will discuss why the crypto market may either experience a major correction before hitting new all-time highs, or may be on its way to new all-time highs without a significant pullback.


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All week I have been scouring the internet, soaking up data, and racking my brain trying to figure out if we are in a bull trap that will turn into a bear market, if we experience a significant correction before the continuation of the bull market, or if we have already started the climb to new all-time highs.

Hello, I’m Crypto Casey and welcome to another episode of Last Week Crypto.

Every Sunday, we review the performance of the largest cryptocurrencies, top gainers, as well as the latest global news stories affecting the crypto markets this past week.

This week we will discuss why the crypto market may either experience a major correction before hitting new all-time highs, or may be on its way to new all-time highs without a significant pullback.

This week’s episode is brought to you by Crypto.com, an exchange with over 100 different cryptocurrencies and over 20 different fiat currencies.

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If you use the link below to sign up for Crypto.com, you will receive $25 worth of cryptocurrency for free when you use the referral code “CryptoCasey,” all while supporting the channel.

Also, every Wednesday I conduct a weekly AMA or an “Ask Me Anything” at Instagram.com/CryptoCasey.

So use the link to my one and only official Instagram account listed in the description area to follow me and ask me anything you want, every Wednesday.

Awesome. It’s time for Last Week Crypto.

1 - Looking at the top cryptocurrencies by market cap, bitcoin up 3.2%, ETH down 1.4%

Cardano, still killing it, up 14.7%, and Binance Coin, up 10.9%.

2 - Looking at the top gainers this week:

Avalanche up 169.6%, Audius, up 79.9%

Arweave up 78.1%, and Solana up 68.7%

Nice. So what’s up with the crypto market? What is it doing? Where are we going?

Well, bitcoin has surged to $49,000 at the time of this video. That $50,000 level will be a pretty big resistance point. Will see where this upcoming week takes us.

Zooming out, 3 - bitcoin and ether are still down about 24% from all-time highs in April. Large cap cryptos like Chainlink and Polkadot are still down about 45% from all-time highs, and as we get into the mid and small cap cryptos, still down around 60% from all-time highs. 

Assuming this bull cycle will continue to rage on, right now still seems like a good time to dollar cost average in. 

Dollar cost averaging is a simple investment strategy where you decide to invest a certain amount of money at a certain frequency to decrease your exposure to price volatility.

An example of dollar cost averaging is if you decide to buy $10 worth of bitcoin once per week every Monday, regardless of the price. So as we continue to chop sideways and slightly upwards, if you’re investing for the long term, DCA is something to consider.

Currently there is a ton of uncertainty in both the traditional and crypto markets with delta variant on the rise, the northern hemisphere entering into flu season, inflation fears, 

major imminent supply chain breakdowns as China has zero tolerance for covid now, shutting down entire shipping ports for an entire month because of one covid case - not even joking, 

And as much as I hate to say it, all of these horrible things are what caused crypto to pop off last year when the pandemic first started.

I’d say two big uncertainties are lingering out there that could be bearish for crypto: one, imposition of new potentially stifling US regulations for crypto, and two: fed tapering.

Paradoxically, both of these uncertainties, depending on how they play out, could actually be the fuel we need to rocket back to all-time highs and ultimately beyond to those $100k btc and $10k eth levels.

So let’s flesh them out a bit more to understand why.

One, regulations. Yes, bad regulation could be bad for crypto. Ultimately, I think it would just stifle tech innovation in the US, piss a lot of people off, and cause a dip.

But, at the end of the day, we do need more regulatory clarity. Why? Because we need more money in the ecosystem and we aren’t going to achieve a significant market cap in the space as a whole with retail and the random micro strategies and greyscales of the world.

Something we all know, but, at least for me personally, don’t keep top of mind is that there is a ton of institutional interest and demand for crypto. However, due to lack of regulatory clarity, they’re still waiting on the sidelines.

And those that aren’t waiting on the sidelines, apparently it’s taking several months to get compliant. This past Friday on another YouTube channel I sometimes make guest appearances on called Crypto Banter, Kevin O’Leary, also known as Mr. Wonderful, 

Described his company’s own journey towards compliance took over four months and was quite arduous. He shared that there are trillions of dollars of institutional money either actively working towards compliance or waiting for more regulatory clarity before jumping in.

Either way, it’s not an “if” trillions of dollars worth of institutional money will flood in, it’s “when” trillions of dollars worth of institutional money will flood in.

And with the stagnation of Tether’s token printer, sure, the market cap its at now got us to the new $64,000 bitcoin all-time high, but we will need more capital coming into the space to push us beyond to new all-time highs.

And the other uncertainty that at first had the stock markets shaky, but then bullish again: fed tapering.

Fed tapering refers to the federal reserve tapering bond purchases. What does this mean? Well, if you’ve seen in previous videos where we talk about monetary policy, basically the federal reserve buys bonds from banks in exchange for cash.

So the more bonds the Fed buys, the more cash that’s in the global financial ecosystem. And the more cash available in the ecosystem, the lower the interest rates to borrow cash.

The more cash in the ecosystem, the cheaper it is to borrow money. When it’s easy to borrow money, people and businesses can generally stay active in the economy and keep the economy functioning in the traditional sense.

Because if no one is spending money or taking on debt, then the economy is doing poorly. If money is more freely available, the economy for the most part should function normally.

However, earlier this week, the Fed warned about their plans to taper bond purchases. So if they stop buying bonds, and stop putting cash into the ecosystem, eventually interest rates will increase, meaning it will be more expensive to borrow money.

The stock market didn’t like that and freaked a bit because, less money in the ecosystem and more expensive loans, especially while still in the midst of a pandemic is not good for all of these businesses used to those stimmy checks and free money hits they’ve gotten used to receiving over a year now.

But in true traditional Fed fashion, as soon as the stock market shuddered, they changed their tune. Dallas Federal Reserve chair 4 - Robert Kaplan is Open to Shifting View on Taper If Delta Curbs Recovery.

If Delta curbs recovery. Well, I think we all know that is pretty much a guarantee at this point. Shipping containers used to cost around $1,500, but now 5 - China-US container shipping rates sail past $20,000 to record high.

Those costs will absolutely be passed on to the consumers and further exacerbate inflation fears as those fears become reality.

More press about the vaccine working, not working, booster shots, hospitals overflowing, not enough workers to staff the hospitals, - I mean yeah, it’s pretty clear delta is curbing economic recovery.

The market agrees and took Kaplan’s openness to shifting the taper timeline as a sign that more stimulus is likely in the future that will keep the stock market propped up. 

So yes, regulatory clarity and shifting of the taper timeline could keep the crypto bull market raging on. Will we have another significant dip before then though?

Personally, I think this pump we’ve had the last two weeks seems unusual and potentially artificial. Yes, the crypto markets follow the stock markets and are very susceptible to coordinated whale manipulation. 

It seems like we had a slight bitcoin and eth pump, that very quickly transitioned to a micro mini alt season. Typically we see longer, larger pumps of bitcoin and eth, that start to flow into large, mid, then small cap alts over several months.

While, just the past two weeks, we’ve had a short, stout pump of bitcoin and eth, that quickly flooded to large and mid cap tokens.

Either way there’s a ton of conflicting data about covid vaccines, and there’s even more conflicting data about whether or not a stock market crash will happen this year, or at least some kind of significant pullback before the holidays.

Some analysts think we will chop sideways, stagnate, and slowly start a downward trend. The market, the economy, the world is very unusual right now so it’s hard to tell if we saw the bottom this bull cycle in crypto already, 

If we will have one more significant pullback that doesn’t necessarily bring in a new bottom, but possibly gives us another shot to buy bitcoin at those $30 to $35k price points.

In the meantime, whether we are still in bull trap territory or making our way further into a bull cycle, make sure you are transferring your crypto off of exchanges to hold safely in a cold storage hardware wallet.

You can scroll down to the description area below to access the correct and official sites of my recommended hardware wallets.

BC Vault is my personal favorite, another option is the Ledger nano backup pack. So Scroll down to check them out.

Or if you would rather make income from your idle digital assets you’re planning to hold long term, you can safely earn interest with services provided by BlockFi.

With a BlockFi Interest Account, your cryptocurrency can earn up to 8.6% APY. Interest accrues daily and is paid monthly. There are no hidden fees and no minimum balances.

So if you’re interested in learning more about BlockFi, you can get up to a $250 bitcoin bonus when you use the link in the description area to sign up, all while supporting the channel.

Protecting your ability to generate income so you can buy more crypto is another important thing to consider. So if you’d like to learn more about the advanced technical concepts of blockchain and become a developer in the space, check out Ivan on Tech’s academy.

If you use the link below, you can access the academy at a discounted price, so scroll down, and check it out.

I’ve had cash on the sidelines still from when before the Fed implemented a back-stop in case Tether went bust around mid-July, and I’m ready to start DCA-ing my way back into a new large, mid, and small cap portfolio.

And I’ll take you guys along on the journey as well. So get ready.

Awesome.

Well that was Last Week Crypto, with me Crypto Casey.

If you enjoyed the episode, please make sure to like this video and subscribe to my channel for more crypto content.

So are the bulls back in town?

Or are we still in bear country?

What do you think about Bloomberg’s data about the current leverage situation?

Let me know in the comments below.

Be safe out there.

Introduction
Crypto.com Exchange
Market Movements
What's up with the Crypto Market?
Start Dollar Cost Averaging In
Two Big Uncertainties...
Regulations
Fed Tapering
Fed Changed their Tune
Another Dip before Moon?
Get a Hardware Wallet ASAP!
Earn Interest with BlockFi
Protect Your Ability to Generate Income
Outro