The short term for crypto is looking bleak in terms of FUD and news coming out. As much as I hate FUD it plays a critical roll in markets be it the stock markets or crypto. One day they say nice things the next it's nothing but negative. Whatever gets the views is what they will write about and sadly that does effect the markets.
Yes we should be mad about it as it's down right stupid however as a smart investor you need to realize that this happens and react accordingly.
At this moment in time the fear aspect of crypto is starting to set in heavy again. With China issuing crack downs on mining and the USA SEC yet again saying there needs to be more regulations and KYC data it's sending the markets into a downward spiral.
Why?
Mainly because crypto was created to stick it to the man in terms of being anonymous and a secure low cost way to transfer funds.
Take that away
What are you stuck with?
A normal digital currency heavily regulated and crushed. It's what institutional investing will do and pretty much the reason why I never wanted it.
You also start to get cry babies like Mark Cuban who talks up all the greatness get rug pulled and cry to government that there needs to be more accountability and regulations. You know because for some reason cry baby billionaires can't take responsibility for their own actions. This is a HUGE negative as more calls for this from people with wealth will start to cause pressure for these actions to be taken further crushing crypto.
China Just Screwed Themselves
In my opinion China is about to learn another hard lesson in the world economy. Closing off your boarders and trying to highly control your currency will never lead it to a world power and instead isolate you and start to cripple your economy.
This "Short Squeeze" we are seeing right now is a result of miners in China having to close up shop and sell off those assets in order to keep any profits that might have. That also means many things for the rest of the world.
- easier to now mine bitcoin and most likely other digital assets
- Less access to China's digital currency which will start to dramatically localize it meaning it will no longer be used as a world resource or peg like the USD currently is.
You see China puts on a brave face of being a world power but in reality it's starting to lose control and funding as their actions have increases sanctions and also increasing hostility towards other countries are quickly making Chinas super power dreams die. It might not seem like it as these things happen over long period of time but being hostile towards other countries while friendly with others who hold really no power at all quickly makes you an outcast that will be paid for many years to come.
The Grand Picture
Short term this will spell a negative effect on crypto most likely over the course of the next few months will become rather bearish. However I strongly feel this will be quickly offset come 2022 and we wont have to wait 3+ years for the next rally. Instead we are cutting that down to months instead of years which is normal for any emerging technology.
The question is...
Will you buy into this FUD and sell off thinking all is over?
Or will you double down and be ready for the next rally?