2020 Crash Carnage Market Buy Opp: Finding the Bottom?
Finding the Bottom of the Crash of 2020
2020 Crash Carnage Market Buy Opp: Finding the Bottom?


It's a dangerous time for day traders in crypto and fiat markets.

Will there be a quick rebound, then another crash downward, or does the wider crypto market continue to crash for a bit?

IMO and past "crash" experiences ('87, Dot.com and 2008) the rebound always happens after the Govt FED cash injection at the banks, but not for long as Stocks Deflate, and the US $ rises fast against other currencies, followed very rapidly by the hyper-inflation  of street prices for products because the cheap money given by the FED at the bank level  means they will cover their positions (stock portfolio and reserves) and only a bit of  lending to their preferred clients (big Companies, etc...)  which allows the "entitled" companies and people with "the means" to pay more, driving the price of everything up for everyone else without means..UGH.

 

The SME: Left in the Cold Again?: Likely 95%. 

Will the SME "Small Medium enterprise" get any access in the US to the FED US$ 1.5 Trillion pledged yesterday over the next three months on top of the Nightly REPO (now morphing into POMO) cash injections, supposedly loaned overnight, and will any of that money be use to create credit for the SME market segment against the FED propped  reserve position of these banks?

Sadly,  it's 95% likely the SME segment will get stiffed yet again (pitch forks and torches anyone?). Imo, history will repeat itself yet again, as the US Govt really has no control of how the private banks handle their money. The banks may talk a good game, however actions speak louder than words. I expect those actions to be largely self serving when it comes to banks, anywhere.

So what to do in the crypto space? Invest long.

There is never a perfect time to invest and catch the absolute lowest point to enter the crypto market.

My Advice? When you do invest however, do each investment in small amounts,  divide up the amount you want to invest (and can afford to lose, say 50% of it, if you pull out before you wanted to) and do it  in steps over a period of time or with some frequency which fits your schedule, doing so in "quiet time" without distractions. Think about it first, but don't over think.

Crypto has dramatic swings up an down given the Whale trading algorithms driving the movement more than the small individual investor trading online at the keyboard. 

Identifying  Crypto "Utility" Value by doing your homework: The Brave Example

Pick cryptos which actually deliver value either now or very soon (say in the next 6 to 9 months if your investment horizon is longer than 3 years as to when you expect your first withdraw/conversion to another store of value). The general rule of thumb? Ask yourself after you have done your homework and comparisons "Does the crypto you are looking at really create some utility for a reasonably large group of users which they can't really get elsewhere, or which is clearly better than competitive utility offers? Also ask yourself if you truly understand the market they serve their value too to get a sense of how quickly the value uptake will be.

Brave is a pretty good "study example". Brave offers a new type of utility to advertisers and content creators alike over the current Google model and, as the general market of browser users catches on (Brave Browser has over 4 Million daily regular users and is growing well)  and advertisers also catch on to the targeted permissioned advertising value with higher conversion rates, BAT stands to grow in value "over the long run" which is BAT today is likely to be worth 10X  in 3 to 5 years and that is a very good return for any investor. Will competitors emerge and steal market share in the permissioned advertising space? Likely, but how well will those competitors  execute? Time will tell, which requires investors in BAT to keep a watchful eye on how this emerging market for online advertising in the permissioned sense evolves (and hopefully rapidly replace the "all the money is ours" Google "centralized wealth" model.)

OK, yes, Brave BAT, like everyone else got hammered by the Whale programmed reaction to the Evolving 2020 Fiat Market Crash action as did every other crypto, largely driven by the PUT & CALL derivative part of the greater network of fiat stock markets converting crypto gains into fiat to cover positions. That said BAT is still a great investment, especially as advertisers over time figure out they need to buy BAT to get that better market targeting to boost their conversion rate from clicks and looks to buys from the rapidly growing Brave Browser user community to  really boost revenue more efficiently with their advertising budget spend.

 

When Will the Crypto Money Supply be 1% of the World Money Supply?: Exactly when who knows, it will be so,  so invest in Crypto now..

Crypto today is way less than 1% of the money supply worldwide, that said there is good reason the entire crypto market space will be worth more than 1 Trillion in 1 or 2 years, maybe getting past that 1% about then.

It will be a bit easier for the general crypto Market to crawl up over 1% of the Money Supply in Market Valuation terms sooner rather than later (BTC is 63.4% Market dominance the last time I looked today)  in that the fiat market space is on the way, right now, in Real time 'RT"  to loosing 50% or even 65% of its value IF, the fiat stock and bond market collective resets to the 30 year long term average trend line, which IMO is likely given FED injections in the past have done nothing to spur SME growth which is 80% of the Jobs and more than 50% of the market value.

 

The Long Trend lines for Stocks/bonds, Start at 1990 or 1971 (birth of fiat): Is  the Bottom of this 2020 Crash Between these lines?: TK says LIKELY

Finding the Bottom of the Crash of 2020...

Watch the price of Oil to predict the "Bottom": A Market with Real Price Discovery helps show the way...

Such another 30% drop would push Oil to US $20.00 barrel (the only market left with any true price discovery, because of fierce independent global competition) , so me thinks we still have another 30% drop in all markets,  before we hit bottom so it's a good idea to watch the price of Oil to help figure that "bottom" out.

The price of Oil to 20.00/Barrel? 30 Yr Avg Trendline says yes..

Another 30% Drop? Maybe, Be prepared the Bottom is not yet in sight..

How long it takes for that additional 30% drop to kick in and rest there awhile in the fiat stock/bond market collective is tough to predict, 2 weeks, 4 weeks, 2 or 3 months? 

I will stick to me gut on this one and say the Long Term Trend line average for these fiat stock/bond markets is likely between the 1971 and 1990 trendlines where the bottom is imo, largely because of the supply chain disruption which will take three to five quarters to return  to business  levels  within 85% of the previous capacity, since demand for products will be off and take time to rebound.

For Crypto, expect the "bottom" to come a bit earlier as investors seek "hard stores of value", but only once they have 'tanked up" on "safe harbor" US$ AND hyper-inflation kicks in, quickly eroding their US $ fiat buying power, due to "higher price" claw backs due to higher prices due to product shortages in many market segments.

So it's a good idea to keep track of the CPI Consumer Price Index basket of goods pricing,  keeping in mind the cost of healthcare (expected to rise fast), vehicles, homes and education are not included in the CPI. If the CPI starts to rise fast, that is Hyperinflation (you also want to watch the price of other items, don't expect much from real estate, it will drop as the banks claw back your credit lines to cover their positions and force you into higher interest mortgages for larger amounts to improve their returns and squeeze your disposable income and buying power  to the max)

One thing is for sure, the market bottom will show up in the next few weeks or months, and that will be a good time to add crypto into your investment portfolio, for the long term, because in my opinion, a quality crypto three year hold will get you at least 5X, likely 10X if you pick real crypto with real utility value, like BAT, as the entire crypto market absorbs some of the inflation as investors finally figure out how to stop the FED and Govt.  fiat money printing erosion of their buying power.

TK over and out

*****

 

 

 

 


thunderboltkid
thunderboltkid

Crypto Tech, Macro Cryptonomics in Main St. Economy & Clean Power Analyst. I analyse & report on market & tech trends behind each, providing reasonable solution insights based on key market, tech & people drivers often operating "under the hood".


50% Big Losses on Power Grid EveryWhere! The Fix.
50% Big Losses on Power Grid EveryWhere! The Fix.

Grid can mean many things to many people, Power Grid, Money Grid, etc.. I comment on Grid networking evolution, IoT and related crypto, Some Wind Energy related thoughts focused on Energy & Finance networks, and their fix-> cryptocurrencies & distributed public permission-less ledgers like #IOTA with a DAG based ledger called #Tangle plus I occasionally also cover private permissioned blockchain ledgers like Hyperledger and PowerLedger which are imo a good fit with IoT/Grid tech

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