If this is the first time you are reading an article by me then stay tuned there will be a series of follow up posts coming up soon. If you know me from before then you must be wondering where had I disappeared for more than a month. I had taken a long break after Christmas and decided to do a digital detox by disconnecting from all forms of online media.
I knew crypto world changes fast but what has happened over the last months is beyond what I had expected. This post will be collection of what are my thoughts about the current market situation in crypto, how do I see it unfolding over the coming months and how I am preparing for it. It will also give you an idea about what topics I will be covering in more details over the coming weeks.
The Bizarre Market Aberration!
Of course like any crypto enthusiast I am happy that Bitcoin and many prominent altcoins have hit all time high but at the same time I am cautious as I see a major market aberration. By this aberration I am referring to the paradox where at one hand we still have not overcome the impact of pandemic but on the other hand the global stock markets have hit all time high and even Bitcoin and Ethereum have crossed their all time highs.
When I see day to day lives of friends and family around me I observe the following:
- Purchasing Power has been Hit- We have all been impacted by the pandemic which has stretched over a year now. Some people have been impacted to a lesser degree while some have been hit worse but we have all felt it to some extent. Most of the people I know are not making any big expenses which they can do without. We have all cut down on our discretionary spending.
- Property Rates are at 5-10 year Lows- Whether you own property or rent your accommodation you would have noticed that rates have gown down significantly. While before the pandemic it was a real struggle to get a good accommodation at any of the big metropolitan cities now the situation has reversed. Rental has come down and many owners are struggling to find buyers or tenants. This is directly linked to the fact that people are not willing to spend a premium on their monthly expenses.
- Small to Medium Enterprises are hit the Worst- I know many people who had small establishments or shops who are considering to shut shop as business is dismal and it is not making economic sense for them to maintain the lease on their shop. Many small shops around my house have already closed down during the last months.
Despite these glaring financial hardships faced by the majority the markets seem to be doing the exact opposite. When the purchasing power of people is low and they are cutting down on all non-essential expenses it is expected the markets will follow suit. However this is far from the reality.
- All Major Stock Indices are at All time High- Look at S&P, NASDAQ, FTSI, NIKKEI, SENSEX they are pumping as if all economic indicators are on steroids.
- Crypto is getting Crazy High- Bitcoin did not only beat it’s previous all time high of $20,000 it is in fact more than doubled it at $40,000. Many altcoins have pumped at an even higher rate.
Why did I Sell Half of my Bitcoin Holdings?
Before you jump to the conclusion that I have lost faith in Bitcoin and crypto let me clarify that my long term faith in crypto is higher than ever. I had accumulated BTC over the last 2 years at an average rate of $6,000. I personally feel the current craze is not based on rational factors and there might be a correction any time soon. The profits I have booked by selling Bitcoin now, I plan to reinvest once the price corrects to a more normal level.
I am aware of the risk I am taking and that is why I did not sell all of it. I just saw a video by Ivan where he claims to be sure about BTC hitting $60,000 in coming weeks and many popular youtubers are even claiming $100,000 by month end. However when I see such level of mania I feel a bit skeptic so decided to book some profits now.
Disclaimer- This is by no means financial advice so DYOR before making any changes to your portfolio.
Why I am moving away from Ethereum?
I have sold off more than 50% of my Ethereum and I am not planning to buy back even if the market corrects. I am more optimistic on rivals like Polkadot and Cardano, still not decided which one of these two to go with. Currently I am a bit biased in favor of Polkadot.
I wrote an article on potential of Polkadot many months back - https://www.publish0x.com/crypto-projects-sams-reviews/polkadot-the-real-deal-or-just-a-wannabe-xkkvjjw
Another reason for moving away from Ethereum is my disappointment from their failure to reduce the fees which makes it unusable for retail users.
I had gained significantly on BarnBridge, HarvestFinance and Sushiswap but I am not able to book the profits as you are well aware what each transaction on Ethereum network costs.
Why am I moving away from Stablecoins?
Normally when I used to book profits in crypto I used to convert them to stablecoins like DAI and USDT so I would keep them on platforms like Nexo, Celsius, AAVE, Compound and BlockFi to earn interest while I wait for a correction. This year I am planning to move away from these USD based stablecoins and opt for PAXG and AMPL.
I don’t see long term stability in USD looking at the shenanigans the Fed is doing, being made worse by the money printing.
PAXG is backed by gold will hold up stronger in case of a economic disaster. I wrote a post on PAXG last year - https://www.publish0x.com/crypto-projects-sams-reviews/pax-gold-better-than-stablecoins-xkkvgro
Monero- The Sleeping Giant!
I am very surprised why many solid crypto projects like BAT and Tezos have not seen any movement last year while meme coins like Doge seem to be mooning based just on Twitter publicity.
The dormant altcoin which surprised me the most was Monero. I think it has huge potential to grow specially with governments planning to put more and more controls on crypto. If you have not included any security based coins in your portfolio it is high time to think again.
I am accumulating Monero on a regular basis and plan to hold it long term together with Bitcoin. I was really please to see that now Monero can be stored on Exodus and Atomic wallets.
I did a post few months back on why I am so bullish on Monero - https://www.publish0x.com/crypto-projects-sams-reviews/monero-the-true-cryptocurrency-xkygdqr
The markets are in a really crazy phase right now and how calm and balanced you can keep yourself will determine the gains you are able to make during the coming years.
Wish you all the best and hope you make the right moves with your favorite coins.
We have really exciting times ahead of us.
CRYPTO PUBLISHING PLATFORMS:
Publish0x Referral - https://www.publish0x.com?a=zPdyJz7eQr
Read.Cash Referral - https://read.cash/r/SamBTC
LBRY Referral - https://lbry.tv/$/invite/@Crypto_Sense:1
CRYPTO SEARCH PLATFORM:
PreSearch Referral - https://www.presearch.org/signup?rid=1557018
CRYPTO EXCHANGES/ WALLETS:
Coinbase Referral - https://www.coinbase.com/join/pradha_zc
Binance Referral - https://www.binance.com/en/register?ref=XBHUADSU
Atomic Wallet Referral - https://atomicwallet.io/join?kid=19NNBQ
Celsius Referral - https://celsiusnetwork.app.link/119892d7cf
NEXO Referral - https://nexo.io/?u=5f1357d1256fa8503b218d12
My Youtube Channel: https://www.youtube.com/channel/UCzVmB63Uy85-Wg9e0IeNIzA