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Bear Market or Bargain Sale?
The cryptocurrency market is currently in a bear market as a result of unforeseen circumstances such as China suddenly cracking down on Bitcoin and cryptocurrency mining following the release of the Digital Yuan. When that was combined with Elon Musk's tweet that Tesla will no longer accept Bitcoin as payment for their vehicles, the value of almost all cryptocurrencies dropped by more than half.
As most traders and holders, I too, saw my portfolio halving in term of value. It wasn’t a pretty sight, and was even disheartening. Despite that though, I was only a little disheartened. But am I disappointed? A little, yes, but that’s all. Not once had I thought on giving up on cryptocurrency.
The bear market is just one cycle of the crypto-market– a phase. It happens all the time, and will continue to happen in the future. Besides, it’s not like the bear market is all bad. No, the bear, despite all of its cons, also has its pros.
One of the positive effects of the bear market, the best one in my opinion, is that all coins are now on sale!
Yes, there’s currently bargain sale for all cryptocurrencies, and big-time institutions are buying en masse.
Buy in the dip. A great number of regular investors, and multi-million (or billion) dollar institutions and hedge funds are taking this popular phrase very seriously. Certainly, we’re still not seeing the effect on the market right now as we’re still in the bear phase. But that’s because the really big investors are still planning their next moves.
For example, the $55 billion dollar hedge fund firm, Marshall Wace, plans on investing in the crypto-sector. The firm is said to planning on investing in the blockchain technology, digital currency, and stablecoins. In particular, stablecoin infrastructure seems to be their focus.
But that’s not all the happenings in the crypto-sector. If you’re a fan basketball and cryptocurrency, specifically the NBA, there’s good news for you too.
Boston Celtic, a popular team in the NBA, has announced their partnership with Socios.com, a blockchain firm that could allow fans to become “superfans” which would allow them to influence club specific decision, trade digital access, and so on.
If that’s not exciting enough for you then how about the possibility of 4,000 institutional funds in Germany possibly being invested in the crypto-market sounds?
Thanks to the Fund Location Act that went effect last July 1, around 4,000 German institutional funds that’s worth about 2 trillion euros, could now invest 20% of the aforementioned funds on cryptocurrency. That’s a whopping 400 billion euros!
Can you imagine the effect of 400 billion euros being injected into the crypto-market?
Regulations Are Not That Terrifying
In this article, I’ll discuss why regulations are not as terrifying as one would think.
As proof of that, institutions are still buying cryptocurrencies in bulk, and/or dabbing into the crypto-sector despite news that stricter regulations might be looming in the horizon.
Now, regulations are nothing new. If a new industry pops out, especially if it's an industry that involved a large amount of money, then you should expect the government to regulate it. That’s just how things work in real life, and cryptocurrency is no exception.
But unlike other industries, the government couldn’t really control cryptocurrency due to its decentralized nature. They could only try to regulate the market, at worst, crackdown on mining and trading. But that’s all they could do.
Implementing stricter regulations? It’s possible. Fully control the market? That’s impossible.
If a government of one country tried to control cryptocurrency, traders would simply move their funds to other country that will not restrict their tradings. Sure it might affect the value of cryptocurrencies in the short term but it won’t really affect the market in the long run.
What will really happen though is that the country that tries to control and restrict cryptocurrency will lose possible taxes from cryptocurrency mining and trading. Not a small lost considering how big the market is. Moreover, once cryptocurrency become mainstream, that country will lose out more. After all, Cryptocurrency can bring in new jobs and opportunity for the people.
It’s because the government around the world know this that most of them could only regulate cryptocurrency as much as they could get away with. Of course there will always be exceptions. As you might have already guessed, some countries had already ban cryptocurrency, either because they felt threatened by it or they’re so blind that they’re unable to see its benefits.
In my opinion though, these countries will soon come to regret such decision.
Now another reason why regulations are not that terrifying was due to the fact that cryptocurrency also have supporters in the government. Yes, not all old men and women in our government are against cryptocurrency. Quite a few of them also sees cryptocurrency as the future.
One good example of this is the president of El Salvador, Nuyib Bukele, who not only support cryptocurrency but is also willing to make Bitcoin a legal tender in his country. Sure, he and his government might be currently taking a rap from the US State Department and the International Monetary Fund (IMF) but as long as the citizens of El Salvador continue to have his back, he’ll be able to push forward with his agenda.
Nuyib Bukele isn’t the only visionary amongst politicians. Argentina’s national deputy for the province of Mendoza, Jose Ruiz Ramon had also introduced a bill that would allow workers to get paid in cryptocurrency. The idea behind his new bill was to allow (independent) workers to strengthen their autonomy and conserve the purchasing power of their remunerations.
Jose Ruiz Ramon’s bill might not be on the same level as that of Nuyib Bukele but his vision is not inferior to his. And unlike the weak politicians that are afraid to step out of their comfort zones and try new things, the two politicians from El Salvador and Argentina are chads of the political scene that are willing to take the risk for the future of their country and constituents.
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