The End Of Crypto

The FED and its 0.5% rate hike, added to the next two hikes in June and July, which seem to be 0.5% more each, have sent the markets to -20% approximately. In the case of the Nasdaq, it has been even worse, sending its losses to -30%.

As expected in such bear markets, the entire crypto world has also fallen to multiples of less than 50%.

Obviously, all those against crypto have taken to social media, warning that they already knew and that this spells the end of crypto.

Also, the Uber driver who a few months ago was telling you about NFTs has stopped doing so.

Is it really the end of crypto?

Crypto has lost 12% in the last 24 hours and 20% over the last seven days.

The rapid destruction of ~$250b in total crypto market cap has cascading effects upon the rest of the crypto markets, of course. Crypto is no stranger to cascading liquidations, where the liquidations of leverage positioned trigger even further liquidations.

But this time, it’s different…

This time we have algorithmic stablecoins!

That has been the case with LUNA and its algorithmic stablecoin UST, which has lost 40% of its PEG to the dollar. This means that when before it was exchanging 1 dollar: 1 UST, now it is exchanging 1 dollar: 0.6 UST.

The truth is that this is terrible. In a protocol with almost $20B, this loss is totally awful, but we must see the glass half full:

• The main dollar-backed currencies have not even flinched (USDC and UST).
• The main ETH algorithmic currency (DAI) hasn’t either.

This opens our vision a bit to continue trusting them.

What to do if you have UST?

I know it is the hardest thing to do, but maybe the best (and most complicated) thing to do is nothing. The coin has lost 40% of its PEG, but it has quickly recovered to -18%. Considering that the Market Cap as of today is $15B and that Luna has $1.4B in BTC reserves that it wants to use to recover the PEG, it may be that in a few days, we won’t even remember it.

However, this is simply my opinion.

I think the news has already discounted the worst-case scenario.

It is a bear market. How to act?

If the stock market has made very few people rich, cryptocurrencies have made much fewer people much richer. This is because it is very complicated to do what you have to do when you have to do it.

Bear markets hurt. No one likes losing money. If you are experiencing stress and pain, know that you are not alone.

This is what bear markets do. They hurt. ‘Depressed’ prices come from depressed market participants. Markets are aggregations of the emotions of those that compose them. Depressed prices come from depressed people.

Those that make it through the bear are those who redirect their emotional strife into positive, opportunity-seeking behavior.

Just because prices are down doesn’t mean there isn’t an opportunity. Opportunity exists independently from secondary market prices.

At Godfather Investor, we continue to believe that this is one of the greatest opportunities of the decade.

We also believe that the markets will continue to fall, but it is certainly a time to slowly increase exposure.

In fact, should ETH fall below $1,700, we would start buying on an unprecedented basis.

Tip

When you least want to buy, that’s when you should buy. When you least want to sell, that’s when to sell.

If you’re on the team, in the next few weeks, I’ll tell you how I’m doing to:

1. Not having any bias toward this bear market.
2. Get 8% on the ETH I’m buying.