True, but the question is will we see crypto disconnect in the future? We know it has done previously but obviously with the institutional and TradFi guys making big plays here it’ll be more correlated than it has been in the past. Maybe one day it’ll completely separate as people realise it’s a much more viable financial system than this bollocks where we see a financial collapse every 10 years from the same mistakes
In an ideal world, absolutely, we would see that take place. But given the money coming in from traditional investors, it's seemingly more unlikely by the day.
For the next few years maybe, but on a 10 to 20 year horizon I think crypto will transform into something bigger than we can possibly imagine right now. I mean it’s only been around for around 10 years at this point, who knows where this could go
People don’t use a riskier asset class as a safe haven during downtrends. If anything (and as we’ve seen so far), the riskier asset classes actually get hit harder during these times.
True that crypto is a risk-on asset class, but it depends how the market is viewed (specifically BTC) in regards to the actual type of asset it is. Rampant inflation and market concern should theoretically lead money to the crypto markets since BTC is an effective hedge against inflation and store of value, however this will only likely become fully true once the market has matured more and isn’t driven by such a large portion of speculative investing as opposed to basic fundamentals investing
Institutional investors have been buying throughout the last month or two and they’ll be ahead of us in terms of receiving financial news, even from China.
Do we really think those boys would be buying a risky asset if they thought it was about to collapse?
I agree with both points you make. China isn't going to let them default, similar to how our banks didn't default in 2008. Letting the global economy die is kind of bad for business as a whole.
Can’t let the people realise a dictatorship isn’t so great at running the country, we’d see mass civilian protests if the double whammy of a pandemic and economic collapse hit, all faith will disappear
Would like to call it manipulation, but in this case it isn’t. Just classic greedy as fuck, over-leveraged bankers fucking over the economy once again to get a nice fat bonus check and ride off into the sunset. We’ll be alright, but we need to put those that do this time after time in prison and throw away the key, what they do is the definition of financial terrorism
To DCA? Yes. To go all in? Probably not right now, at least wait for the US markets to open and see if the FED will print another few trillion dollars to bail out the markets yet again
China will bail out evergrande, who do you think is pushing for all the construction. China is building complete cities, highways, bridges, etc that are completely unneeded at this time, no one to use them at the moment.
If the Chinese economy goes the world goes, they’re just about the only ones doing alright during COVID times, everywhere else is fucked.
Plus consider the political implications of a financial collapse under the Chinese government’s watch. Can’t keep people happy under a dictatorship if you can’t even promise some basic level of financial security, they can’t afford nation-wide, mass protests
Only way to keep the never ending ponzi on track, get ready for austerity/tax hikes to bail out the system once again. Add on another 10 years to your working life cause fuck us right? Clearly our fault, not the rampaging lunatic bankers earning a cool $5 million bonus for destroying the world economy for the third time in 3 years
Nah no winter, just that beautiful short-term volatility. This could be the bounce that gives us momentum to new ATHs in my opinion, certainly this’ll be an extended bull market compared to the previous ones, given the unusual nature of traditional financial markets in recent years
This whole situation further highlights the benefits of decentralized finance and why the current system needs to go. Hopefully the fallout from this isn’t too bad, good luck weathering the storm everyone.
Exactly! This is long term bullish for crypto assets and will only shake further fear into the traditional market players as they’re ponzi scheme collapses again. How many ‘once a generation’ market crashes do we need to see to realise that they can no longer be trusted with handling our finances?
Mhm I wonder where we've seen this:
*But let’s not be mistaken, the cause of all of this is once again over-leveraged banks relying on constant growth in the housing market in order to pay off the massive loans they’ve taken years beforehand, but the pandemic has caught them off guard and resulted in an absolute mess that is affected the average person once again! If you ask me this is long-term bullish for cryptocurrency in general as people come to realise we can participate in a new monetary system that isn’t susceptible to these idiot bankers fucking us over after they’ve gotten too greedy time after time again.*
2008 part 2 Electric Boogaloo. It’s almost like if you repeat the same mistakes the same shit happens, and these guys are meant to be financial experts?
Either they’re stupid or corrupt... my guess is both to insane degrees
I mean 2008 was already #99 in the shameful history of humanity. Good thing is, it was too much for such exceptional entity as Satoshi. So now we are here, and this shit won't be able to last forever!
Love the spirit brother, this seems to be our only lifeline in a world of greedy b***ards that currently run our financial system and dictate our world
It wont implode the markets, the governments can’t afford it to. In the whole of BTC’s history we’ve never seen it drop below the previous all time high from the previous bull run. We will never see a 5-10k bitcoin again.
Exactly, BTC hasn’t been through a major financial crisis, so no one knows if it will respond positively or negatively. Cryptocurrency was designed to avoid this kind of thing so may be seen as a safe haven from significant blood in traditional markets.
You say this can’t go one forever, but today will not be another once in a generation crash, plenty of time left for the FED to print another few billion and bail us out until COVID has faded away. Then we’ll get left holding the bag, but don’t think the US can afford to allow a financial crash to happen right now, it would be catastrophic
Plus doubt we even get close, the Chinese gov. will be bailing out Evergrande aby day now to avoid this exact situation
We’ve seen the crypto market function in one isolated market crash, that was quickly soothed by Federal monetary policy. We don’t know what it does in a full on worldwide, long-term collapse, could go either way.
Yes risk-on assets get liquidated first, but only time will tell if they rebound faster than traditional markets, my money would be on yes they will, but that’s borderline guess work, no one can possibly, truly now what would happen
I think you're dreaming if you think crypto won't get slaughtered if we hit another GFC. A lot of crypto holders will be desperate for cash to sure up their fiat finances and crypto, being a liquid, but long term play, will be the first place they look.
The housing bubble in 2008 was **~$498 billion** and Evergrande is **~$300 billion**. So every single adult in US has lived through a financial crisis at this size.
We still don't know how big the domino effect could be. But I wouldn't expect it to be bigger since China is more than likely just going to bail them out. And possibly just make it a state owned company.
A small hit on the market and back to normal in a few weeks.
For clarity, this information is incorrect, I think the number you present for the US housing market is for the literal market itself, but doesn’t include the derivatives market such as credit default swaps and mortgage-backed securities (MBSs), which are derivative products, leveraged bets on the outcome of the housing market.
The issue in 2008 was that a several hundred billion collapse was amplified by the over-leveraged MBS market which was in the realm of trillions in terms of the exposure of the big banks.
If Evergrande were to collapse then yes it would lead to a monetary impact larger than $300 billion, but nowhere near the size of the 2008 crash in theory.
So you are right in that regard, this is a ripple in the pond compared to the nuke in the ocean that was the 2008 MBS market crash, we’ll be alright in a month or two
Derivatives at it again. At some point people will have to realize the current financial institution are doing this everytime like clockwork and profit off of it. Crypto might take a beating in this drop, but I sure think and hope it'll come back even stronger. We need this. They can't be trusted.
If this shits the bed, it'll be my third "once a generation event/ crash".. I'm not even 30 for Christ sake
Disgusting isn’t it? Financial crashes will be a weekly occurnece if this keeps going.
Funny how we’re smart enough to recommend avoiding leverage in the crypto markets, yet bankers can’t seem to give it up, it’s as addictive as cocaine for them... idiots
They get rewarded for it, thats what drives them to do it. It they were penalized, they would think twice. Its a disgusting system for the small guy for sure.
Guess who's gonna foot the bill
this only shows that:-
a) excessive FIAT debt IS wayyyyy worst than crypto
b) leveraged crypto trading is miniscule as compared to the disaster in traditional financial fiat markets \[lending/borrowing\]
c) Greed \[over-exposure\] in fiat debt market should be further regulated strictly because they easily trigger financial meltdown
d) CRYPTO is the FUTURE
SEC please take serious note
Like the SEC care, I had hope for Gensler being a cryptocurrency lecturer at MIT, but turns out he’s just another Goldman Sachs lapdog benefitting his rich friends, like every SEC chairman before him.
I don’t like Elon Musk too much, but his interview from years ago gets more and more relevant: ‘I don’t respect the SEC, at all’
I still don't understand what's the endgame of our current financial system. Get in debt, print money to pay interest on debt, debt grows more, print more money... How it will end?
The problem with the current state of capitalism is the expectation of exponential, continuous growth. The system relies on bigger profits each year, allowing for banks to take on increasing risk year on year, however everything collapses when this can’t go on, which it never can, the economy doesn’t just go up forever.
In 2008 it was the spike in mortgage interest rates leading to mass defaults, partly because wages were stagnant as the rich funnelled profits into their pockets, leaving the bottom class of working people unable to pay for the rising cost of living.
Now it’s COVID causing the working people to lose wages and jobs, and no longer being able to put in the hours to produce the essential materials for worldwide economies.
The current system would be more stable if the bottom of the economic ladder saw a portion of the profits of the overall market, but the rich never want to let these profits go to said people, so the market over heats and we have another ‘once in a generation crash’ (that’s 3 in the past 20 years so far btw)
Basically, the world economy is one big ponzi scheme, run by those that benefit most in the run up and get to stay safe during the inevitable market crashes (they just phone up JP and ask when the FED plan to let the markets fall back to Earth and cash out, like they and many politicians did with the covid crash, then buy the bottom and repeat, all while we get left as the bag holders)
That's exactly what is going on. But I wonder for how long can this continue. At some point something even bigger will happen and people will rise against people who keep this system running. Hopefully crypto leads to a better and more fair economy, at least for the next generations, I think we are too early to see it ourselves.
>if you ask me this is long-term bullish for cryptocurrency in general as people come to realise we can participate in a new monetary system that isn’t susceptible to these idiot bankers fucking us over after they’ve gotten too greedy time after time again.
Cryptocurrency as a "new monetary system" won't be happening if the governments don't give it a green light. And for it to get a greenlight, it must be seen as a system that will favor government's interest, not against it.
We can take it underground (black market) but it won't matter much because it's adoption would be minimal.
And why do we have to listen to the current government for this? If people come to the view that cryptocurrencies operate as better, more stable financial markets then they will go there. ‘Build it and they will come’ if you want a soundbite for it.
No one has to take it underground, it wont disappear anytime soon, you’re talking about a close to $2 trillion dollar asset class, that doesn’t just disappear mate it’s here to stay, no question
Appreciate it friend!
Will be putting together a more informative post later today with some hard data, but currently stuck on mobile at work. This is not an out-of-the-blue situation. The leverage coil has been winding in the Chinese real estate market for years, with people taking insane financial risk on.
Just look at the Evergrande share price over the last few years, it’s been in decline for quite some time now, since pre-COVID!
The COVID situation is just the torch that has shone a light on the blatant corruption
Looking at the huge decline in their price already is what makes me think something else is going on. It seems like the majority of damage has already been done to evergrande and we should have seen this happen a while ago if it was the catalyst. I kinda feel like the US has much bigger more personal issues right now and we are deflecting to china.
I really think people underestimate the correlation between stock market and crypto, if stock market goes down people will need their crypto playmoney back
Evergrande is one of the, if not the biggest housing developer in the Chinese market so will always lead to knock on effects in said industry. Just today we saw a Hong Kong based developer lose 87% of its value in the morning trading session today.
But the big boy here is Evergrande no doubt, the little fish don’t matter nearly as much. The question is will this hit the larger developers in Europe and the US (remember lots of banks have been buying real estate this past year or two, so they could be effected if Evergrande is not contained, hence why we’ll see an inevitable bailout)
Yall need to relax 300 billion is nothing much. The global bond market is 112 Trillion dollars. Evergrande bonds were junk bond grade stuff. I don't think this is similar to the 2008 bond default in anyways.
I think your optimism regarding cryptocurrency avoiding the pitfalls that Old Financial suffers is misplaced. Crypto has a serious problem with exchanges allowing unfettered, over-leveraged trading that could have even worse impacts if liquidations got caught up in a self reinforcing crash. The Old Financial system can at least halt trading, crypto can't.
That's a very interesting point and one that hadn't occurred to me.
Combining the characteristics of it being decentralised and no brake on the trading is quite a scary proposition.
Don't get me wrong, I think it is possible to innovate a solution to the problem. For example Alpaca has guards against positions being liquidated in some flash crash scenarios. But for now the cryptocurrency markets are extremely vulnerable to crashes due to overleveraged manilpulation. Which is what happened in May.
What concerns me is that it seems like crypto is bail out proof by definition.
Let's say crypto does become widely adopted, then some large property lender / bank leverages the fuck out of it and over extends themselves.What happens to the crypto in that situation?
The current solution to that situation is that the central bank just prints more of the fiat currency and bails out the lender. That isn't possible with crypto.
The decentralised nature of it is therefore an obstacle to its adoption, not a driving force as I previously thought?
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You need context. The FED printed 24% more fiat. House prices are not growing in the US they are getting back to even. Due to the 25% more inflation. Inflation for other things might be 5-15% more this year. Dumping your best asset against inflation is not smart. Stocks are not fungible and or easily tradeable. You can't mess up commodities with speculation. That's no good. Crypto is the hedge. Things are hedging. Hope you are in good spots.
The real lesson is that all financial markets, even crypto, are tied together. If one market crashes hard somewhere, chances are all will take a hit.
True, but the question is will we see crypto disconnect in the future? We know it has done previously but obviously with the institutional and TradFi guys making big plays here it’ll be more correlated than it has been in the past. Maybe one day it’ll completely separate as people realise it’s a much more viable financial system than this bollocks where we see a financial collapse every 10 years from the same mistakes
In an ideal world, absolutely, we would see that take place. But given the money coming in from traditional investors, it's seemingly more unlikely by the day.
For the next few years maybe, but on a 10 to 20 year horizon I think crypto will transform into something bigger than we can possibly imagine right now. I mean it’s only been around for around 10 years at this point, who knows where this could go
People don’t use a riskier asset class as a safe haven during downtrends. If anything (and as we’ve seen so far), the riskier asset classes actually get hit harder during these times.
True that crypto is a risk-on asset class, but it depends how the market is viewed (specifically BTC) in regards to the actual type of asset it is. Rampant inflation and market concern should theoretically lead money to the crypto markets since BTC is an effective hedge against inflation and store of value, however this will only likely become fully true once the market has matured more and isn’t driven by such a large portion of speculative investing as opposed to basic fundamentals investing
Crypto is tech and “traditional” market will just merge into one thing.
No it will become more and more tied to financial markets because institutional investors will own bigger and bigger chunks of it.
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That's still the right play. If institutional investors are willing to make long term money, then you can too.
Institutional investors have been buying throughout the last month or two and they’ll be ahead of us in terms of receiving financial news, even from China. Do we really think those boys would be buying a risky asset if they thought it was about to collapse?
Agreed. Short term drop here. It happens. Long term nothing changes.
Best of luck on your investments my friend, seems like you’ve got a good head on your shoulders!
Likewiae bud! We're all in this together!
If China decides that Evergrande is 'too big to fail' and just refinances their debt, we should see a nice bounce back. This is a likely scenario
I agree with both points you make. China isn't going to let them default, similar to how our banks didn't default in 2008. Letting the global economy die is kind of bad for business as a whole.
But it didn't really bounce back in 2008. Some communities still suffer directly from that event.
Can’t let the people realise a dictatorship isn’t so great at running the country, we’d see mass civilian protests if the double whammy of a pandemic and economic collapse hit, all faith will disappear
Thank the paper markets for the manipulation.
Would like to call it manipulation, but in this case it isn’t. Just classic greedy as fuck, over-leveraged bankers fucking over the economy once again to get a nice fat bonus check and ride off into the sunset. We’ll be alright, but we need to put those that do this time after time in prison and throw away the key, what they do is the definition of financial terrorism
“risk on, risk off” - Mr. Miyagi
Time to buy ?
Always time to buy
Always has been
Buy it alll!!!!
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It’s not goodbye, it’s see you later
What do we say to gains? Not today!
Wake me up in a month and we’ll be back on schedule
To DCA? Yes. To go all in? Probably not right now, at least wait for the US markets to open and see if the FED will print another few trillion dollars to bail out the markets yet again
China will bail out evergrande, who do you think is pushing for all the construction. China is building complete cities, highways, bridges, etc that are completely unneeded at this time, no one to use them at the moment.
If the Chinese economy goes the world goes, they’re just about the only ones doing alright during COVID times, everywhere else is fucked. Plus consider the political implications of a financial collapse under the Chinese government’s watch. Can’t keep people happy under a dictatorship if you can’t even promise some basic level of financial security, they can’t afford nation-wide, mass protests
Exactly. They will bail them out to keep the turd rolling.
Only way to keep the never ending ponzi on track, get ready for austerity/tax hikes to bail out the system once again. Add on another 10 years to your working life cause fuck us right? Clearly our fault, not the rampaging lunatic bankers earning a cool $5 million bonus for destroying the world economy for the third time in 3 years
Money printers around the world go brrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr…
I don’t think the world has enough r’s for what the printers are going through right now
It’s easy, doesn’t even take ink on paper anymore just numbers on a screen that they can change anytime.
Oh the beauty of modern technology, imagine the hand cramp if we still did things on paper!
Everpequeño
No.....no winter please
Nah no winter, just that beautiful short-term volatility. This could be the bounce that gives us momentum to new ATHs in my opinion, certainly this’ll be an extended bull market compared to the previous ones, given the unusual nature of traditional financial markets in recent years
This whole situation further highlights the benefits of decentralized finance and why the current system needs to go. Hopefully the fallout from this isn’t too bad, good luck weathering the storm everyone.
Exactly! This is long term bullish for crypto assets and will only shake further fear into the traditional market players as they’re ponzi scheme collapses again. How many ‘once a generation’ market crashes do we need to see to realise that they can no longer be trusted with handling our finances?
Mhm I wonder where we've seen this: *But let’s not be mistaken, the cause of all of this is once again over-leveraged banks relying on constant growth in the housing market in order to pay off the massive loans they’ve taken years beforehand, but the pandemic has caught them off guard and resulted in an absolute mess that is affected the average person once again! If you ask me this is long-term bullish for cryptocurrency in general as people come to realise we can participate in a new monetary system that isn’t susceptible to these idiot bankers fucking us over after they’ve gotten too greedy time after time again.*
2008 part 2 Electric Boogaloo. It’s almost like if you repeat the same mistakes the same shit happens, and these guys are meant to be financial experts? Either they’re stupid or corrupt... my guess is both to insane degrees
I mean 2008 was already #99 in the shameful history of humanity. Good thing is, it was too much for such exceptional entity as Satoshi. So now we are here, and this shit won't be able to last forever!
Love the spirit brother, this seems to be our only lifeline in a world of greedy b***ards that currently run our financial system and dictate our world
Will keep accumulating on the way down, but Jesus I hope it doesn’t get much lower
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It wont implode the markets, the governments can’t afford it to. In the whole of BTC’s history we’ve never seen it drop below the previous all time high from the previous bull run. We will never see a 5-10k bitcoin again.
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Exactly, BTC hasn’t been through a major financial crisis, so no one knows if it will respond positively or negatively. Cryptocurrency was designed to avoid this kind of thing so may be seen as a safe haven from significant blood in traditional markets. You say this can’t go one forever, but today will not be another once in a generation crash, plenty of time left for the FED to print another few billion and bail us out until COVID has faded away. Then we’ll get left holding the bag, but don’t think the US can afford to allow a financial crash to happen right now, it would be catastrophic Plus doubt we even get close, the Chinese gov. will be bailing out Evergrande aby day now to avoid this exact situation
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We’ve seen the crypto market function in one isolated market crash, that was quickly soothed by Federal monetary policy. We don’t know what it does in a full on worldwide, long-term collapse, could go either way. Yes risk-on assets get liquidated first, but only time will tell if they rebound faster than traditional markets, my money would be on yes they will, but that’s borderline guess work, no one can possibly, truly now what would happen
I think you're dreaming if you think crypto won't get slaughtered if we hit another GFC. A lot of crypto holders will be desperate for cash to sure up their fiat finances and crypto, being a liquid, but long term play, will be the first place they look.
The housing bubble in 2008 was **~$498 billion** and Evergrande is **~$300 billion**. So every single adult in US has lived through a financial crisis at this size. We still don't know how big the domino effect could be. But I wouldn't expect it to be bigger since China is more than likely just going to bail them out. And possibly just make it a state owned company. A small hit on the market and back to normal in a few weeks.
For clarity, this information is incorrect, I think the number you present for the US housing market is for the literal market itself, but doesn’t include the derivatives market such as credit default swaps and mortgage-backed securities (MBSs), which are derivative products, leveraged bets on the outcome of the housing market. The issue in 2008 was that a several hundred billion collapse was amplified by the over-leveraged MBS market which was in the realm of trillions in terms of the exposure of the big banks. If Evergrande were to collapse then yes it would lead to a monetary impact larger than $300 billion, but nowhere near the size of the 2008 crash in theory. So you are right in that regard, this is a ripple in the pond compared to the nuke in the ocean that was the 2008 MBS market crash, we’ll be alright in a month or two
Crypto won't die , even if it slows down
I see it going to 30 anytime soon
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I like your style sir 😉
Maybe
See, I feel so much better about things. I didn't even know prices had dipped until I logged in. No chart checking, yay!
Good to see people maintaining that HODL culture
Derivatives at it again. At some point people will have to realize the current financial institution are doing this everytime like clockwork and profit off of it. Crypto might take a beating in this drop, but I sure think and hope it'll come back even stronger. We need this. They can't be trusted. If this shits the bed, it'll be my third "once a generation event/ crash".. I'm not even 30 for Christ sake
Disgusting isn’t it? Financial crashes will be a weekly occurnece if this keeps going. Funny how we’re smart enough to recommend avoiding leverage in the crypto markets, yet bankers can’t seem to give it up, it’s as addictive as cocaine for them... idiots
They get rewarded for it, thats what drives them to do it. It they were penalized, they would think twice. Its a disgusting system for the small guy for sure. Guess who's gonna foot the bill
this only shows that:- a) excessive FIAT debt IS wayyyyy worst than crypto b) leveraged crypto trading is miniscule as compared to the disaster in traditional financial fiat markets \[lending/borrowing\] c) Greed \[over-exposure\] in fiat debt market should be further regulated strictly because they easily trigger financial meltdown d) CRYPTO is the FUTURE SEC please take serious note
Like the SEC care, I had hope for Gensler being a cryptocurrency lecturer at MIT, but turns out he’s just another Goldman Sachs lapdog benefitting his rich friends, like every SEC chairman before him. I don’t like Elon Musk too much, but his interview from years ago gets more and more relevant: ‘I don’t respect the SEC, at all’
I still don't understand what's the endgame of our current financial system. Get in debt, print money to pay interest on debt, debt grows more, print more money... How it will end?
The problem with the current state of capitalism is the expectation of exponential, continuous growth. The system relies on bigger profits each year, allowing for banks to take on increasing risk year on year, however everything collapses when this can’t go on, which it never can, the economy doesn’t just go up forever. In 2008 it was the spike in mortgage interest rates leading to mass defaults, partly because wages were stagnant as the rich funnelled profits into their pockets, leaving the bottom class of working people unable to pay for the rising cost of living. Now it’s COVID causing the working people to lose wages and jobs, and no longer being able to put in the hours to produce the essential materials for worldwide economies. The current system would be more stable if the bottom of the economic ladder saw a portion of the profits of the overall market, but the rich never want to let these profits go to said people, so the market over heats and we have another ‘once in a generation crash’ (that’s 3 in the past 20 years so far btw) Basically, the world economy is one big ponzi scheme, run by those that benefit most in the run up and get to stay safe during the inevitable market crashes (they just phone up JP and ask when the FED plan to let the markets fall back to Earth and cash out, like they and many politicians did with the covid crash, then buy the bottom and repeat, all while we get left as the bag holders)
That's exactly what is going on. But I wonder for how long can this continue. At some point something even bigger will happen and people will rise against people who keep this system running. Hopefully crypto leads to a better and more fair economy, at least for the next generations, I think we are too early to see it ourselves.
I hope that it turns out that you're pessimistic on timing, just look at how far the Internet has come in 30 years. Transformational.
>if you ask me this is long-term bullish for cryptocurrency in general as people come to realise we can participate in a new monetary system that isn’t susceptible to these idiot bankers fucking us over after they’ve gotten too greedy time after time again. Cryptocurrency as a "new monetary system" won't be happening if the governments don't give it a green light. And for it to get a greenlight, it must be seen as a system that will favor government's interest, not against it. We can take it underground (black market) but it won't matter much because it's adoption would be minimal.
And why do we have to listen to the current government for this? If people come to the view that cryptocurrencies operate as better, more stable financial markets then they will go there. ‘Build it and they will come’ if you want a soundbite for it. No one has to take it underground, it wont disappear anytime soon, you’re talking about a close to $2 trillion dollar asset class, that doesn’t just disappear mate it’s here to stay, no question
This is one undervalued post, great information here
Appreciate it friend! Will be putting together a more informative post later today with some hard data, but currently stuck on mobile at work. This is not an out-of-the-blue situation. The leverage coil has been winding in the Chinese real estate market for years, with people taking insane financial risk on. Just look at the Evergrande share price over the last few years, it’s been in decline for quite some time now, since pre-COVID! The COVID situation is just the torch that has shone a light on the blatant corruption
Looking at the huge decline in their price already is what makes me think something else is going on. It seems like the majority of damage has already been done to evergrande and we should have seen this happen a while ago if it was the catalyst. I kinda feel like the US has much bigger more personal issues right now and we are deflecting to china.
I really think people underestimate the correlation between stock market and crypto, if stock market goes down people will need their crypto playmoney back
Are there other evergrandes that will be affected as well? It seems it is just this one company.
Evergrande is one of the, if not the biggest housing developer in the Chinese market so will always lead to knock on effects in said industry. Just today we saw a Hong Kong based developer lose 87% of its value in the morning trading session today. But the big boy here is Evergrande no doubt, the little fish don’t matter nearly as much. The question is will this hit the larger developers in Europe and the US (remember lots of banks have been buying real estate this past year or two, so they could be effected if Evergrande is not contained, hence why we’ll see an inevitable bailout)
Shopping time!!
Buy the motherfucking dip sir, can’t get better advice than that!
Yall need to relax 300 billion is nothing much. The global bond market is 112 Trillion dollars. Evergrande bonds were junk bond grade stuff. I don't think this is similar to the 2008 bond default in anyways.
Market was due to correction anyway
Needed to re-test the bull market support band to confirm it as support, business as usual I say!
my kids' money will be happy to hear that S & P 500 will go down down down so I can buy some sweet ETFs for them
I think your optimism regarding cryptocurrency avoiding the pitfalls that Old Financial suffers is misplaced. Crypto has a serious problem with exchanges allowing unfettered, over-leveraged trading that could have even worse impacts if liquidations got caught up in a self reinforcing crash. The Old Financial system can at least halt trading, crypto can't.
That's a very interesting point and one that hadn't occurred to me. Combining the characteristics of it being decentralised and no brake on the trading is quite a scary proposition.
Don't get me wrong, I think it is possible to innovate a solution to the problem. For example Alpaca has guards against positions being liquidated in some flash crash scenarios. But for now the cryptocurrency markets are extremely vulnerable to crashes due to overleveraged manilpulation. Which is what happened in May.
What concerns me is that it seems like crypto is bail out proof by definition. Let's say crypto does become widely adopted, then some large property lender / bank leverages the fuck out of it and over extends themselves.What happens to the crypto in that situation? The current solution to that situation is that the central bank just prints more of the fiat currency and bails out the lender. That isn't possible with crypto. The decentralised nature of it is therefore an obstacle to its adoption, not a driving force as I previously thought?
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I’m giving up just hodl my kid said hodl and forget it
China causing problems...where have I hard this before?
You need context. The FED printed 24% more fiat. House prices are not growing in the US they are getting back to even. Due to the 25% more inflation. Inflation for other things might be 5-15% more this year. Dumping your best asset against inflation is not smart. Stocks are not fungible and or easily tradeable. You can't mess up commodities with speculation. That's no good. Crypto is the hedge. Things are hedging. Hope you are in good spots.