For someone who can barely swim, I love the sea. I am not sure whether it is the vast expanse, the unknown depths or the power, but it pulls me in. Maybe, it is my sense of helplessness in its presence, the lack of control I have over it and my ability to survive within it that is so compelling. Maybe, freedom is found in helplessness, when there is nothing left to be done, no move to make.
I hate feeling helpless.
Over the last couple days, I have Barely touched base on crypto, yet it was still close to my thoughts along the way, as at every turn, there were mental triggers. There was a chain hanging as a fence and the first thing that came to mind, was to take a photo for a post. At dinner, I overheard two guys behind me discussing their portfolios.
Shitcoiners.
What is a shitcoin these days? It used to be related to market cap, but looking through the top 100, there are a lot of useless coins with high market caps - will they last?
Last what?
This is what we have to work out for the future - what is lasting - because if all it comes down to is price, then they are all fucked, because eventually, price fails because it is driven by hype and sentiment alone. Without fundamentals, something else will drive hype and because the return drops, sentiment fails too. There has to be more.
Even the people who bought a Tesla before release, expected to take delivery of a car one day and, I think that real investors expect the same from a crypto project. They need a product of some kind, a good, service - an earning usecase that is compelling enough to attract and retain users.
The understanding on "what is valuable" is going to be an increasing and developing conversation in the future, because investors and consumers at all levels are going to start running into issues - There is nothing of value left to own and that means, creating something worth owning.
Crypto is doing this already.
Of course, many of the people outside of crypto are yet to believe in what is happening, but those inside are already changing their thinking on what is considered an asset, what is tradeable, what is worth using. The new real estate is digital, because so many people have been priced out of the physical world and, it is only getting worse.
The income to cost ratio for homebuyers is the worst it has been in many places around the world and there is no sign the wages are going to catch up to base inflation, let alone make inroads into ownership models. As a result, consumers over the last decades have been increasing their spending on non-return consumables, like electronics, cars and holidays, with more and more people finding themselves short at the end of the month or, living hand to mouth.
I was reading that while 70% of Australians are ahead on their mortgage currently, that means that 30% are not and with raising interest rates, how many of them will end up defaulting? How many need to default to crash the housing market?
In another study, it came out that 60% of loan applicants at one of the large banks were encouraged to lie about their financial conditions to secure a loan. How much junk is out there? Raise interest rates a bit and we are going to find out quick smart - as the inflation rate in combination means many people are going to be unable to afford the basics in life and will eventually fold their hand.
Feeling helpless?
I suspect that there are many people out there who in the pursuit of their dream home or even a foot in the real estate door, have over extended themselves and are getting pretty stressed about the direction things are travelling. How long can they hold out for under tough economic times? A month, three months? a year? Downturns tend to be multiple years long and it could take a decade to get back to zero - that is a long time and far too much for most people to survive.
It scares me too.
I am only 2 years in on the current loan, but at least for my wife and I we have added some value to the house and, we went in with a bit of collateral also - so we should be okay. On top of this, our loan is collared for another 8 or 9 years at a low-ish interest rate, which will help under financial duress. But, nothing is certain and under economic downturn, there is no guarantee either of us will keep our jobs.
If the worst were to happen, how fast will we pivot and simplify our financial lives, moving into a far cheaper home? How long would we try and hold on for in the hope to ride it out?
I am a holder.
That is a scary proposition.
But, I am not helpless yet and despite the uncertainty of crypto and the world in general, I am still able to act to try and mitigate damage and if very successful, take advantage of opportunities as they arise. This is the thing with downturns - disaster for those without, opportunity for those with. I have always been without - will it be the same the next time round?
I hope not.
I am tired of being washed out to sea, struggling to keep my head above water. Have to learn how to swim at some point.
Taraz
[ Gen1: Hive ]