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Inflation

Merge to the Splurge - Inflation and Inflated ExpectationsLots of things happening in finance today. US inflation is at 8.3% (higher than expected with no end in sight), which tanked both crypto and the stock market at the same time. Goes to show that there's still a lot of overlap between the two right now. Also coming up is the much anticipated "merge" on Ethereum (going to happen some time this week, according to Vitalik), which will finally migrate their chain from proof-of-work over to proof-of-stake. As interest rates start to get hiked further, crypto coins will likely need some sort of staking mechanism to survive - or at least offer some kind of utility beyond marketing hype. Some things to keep in mind: - The "merge" is not likely to affect ETH's gas prices, since that comes later during the "sharding" phase. Until then, most dApps created on the ETH ecosystem will still largely sit idle/abandoned. - During recessions, cash is king - and the coins that resemble that the most (projects that are used as currency, rather than speculation) is likely to perform better overall. That means coins that leaned into the "store-of-value" idea (and have oversaturated mind-share) may be in big trouble - which includes Bitcoin, as well. - Many Web3 "fintech" startups (including some very big ones) operated under the assumption that BTC/ETH was going to go up forever - some already made headlines this year as they imploded on itself after the downturn, but we're likely to see more of them pop up as we get further into the winter as a whole. - Coins that offer substantial staking rewards (Tezos, Algorand, Cosmos, Solana, TRON, etc.) are outperforming the banks right now by a very large margin, and may be a good position to grow as the banks continue to drag their feet. Holders of coins that were reliant on the "perpetual growth" model in order to offer staking rewards will likely see their rates shrink over time. (If they're desperate enough, it may even go negative. 😨) - ETH2 coins are, by default, "locked up" for an indeterminate length of time - lots of people signed up to be validators during the December launch in 21' but the legality of it will likely be in question. As the market dips further, many will want to liquidate and there will be more pressure put on the ETH team to do so. (If not, a few class-action suits may be in the pipeline.) - What happens to the miners after the "merge"? Up until now, ETH was by far, the most reliable and profitable coin to mine, but that will go away, overnight. Some competitors are trying to use the opportunity to fracture the ETH community by offering their own places to mine, but longer-term, PoW's real value lies in their ability to allocate their processing power to "useful" mining. (e.g. Gridcoin, Golem, etc.) We may start to see a shift in favor of those types of projects after miners start to do more research on their own. Long story short, the projects that were reliant on perpetual fundraising are likely to be out - replaced by projects that have revenue/profits and greater sustainability. The crypto winter may be brutal for some, but the silver lining is that we may finally get to see a crypto ecosystem that prizes utility and sustainability over short-term hype. It's going to be a crazy time either way - good luck, folks.
Long
by RyanTanaka
Why Rice Prices Determine the Direction of Interest Rates?Recently, I received questions asking my opinion on their borrowing cost, if they should go for fixed or float rates. We somehow know there is inflation, but not exactly sure how long it will last and how bad it will get. Because higher inflation leads to higher interest rates. While I cannot advise them as I do not have a banking license to do so. However, I can point them to the commodity markets, I hope by doing so, it can help them to understand and read into the direction of interest rates with greater clarity. Background on edible commodities: Rice is a staple in the diets of more than half of the world’s population, especially in Latin America, Asia, and the Middle East. Annual production of milled rice tops 480 million metric tons, which makes it the third most-produced grain in the world after corn and wheat. An increase in rice prices or edible commodities, it will really add pressure to the existing global inflationary pressure. Hardship will be more intense especially compare to other commodities like crude oil. In short, people can still live with some inconvenience without cars, but not without food. Therefore, when food prices become much more expensive, the central banks immediate and urgent measures is to counter it by rising interest rates. Content: . Why edible commodities determine the direction of interest rates? . Technical studies . How to hedge or buy them? Rice Market: 91 Metric Tons $0.005 = US$10 Example - $0.01 = US$20 $18.00 = 1800 x US$20 = US$18,000 From $18 to $19 = US$10,000 If you are trading this market for the short-term, do remember to use live data than delay ones. Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises.
CBOT:ZR1!Education
by konhow
Why Crude Oil is Trending Higher Again, Breaking Above US$100In this tutorial, I will explain both its fundamental and technical reasons for crude oil likely to break above and stay above US$100. I am having two portfolios at all times, one for long-term investing and the other for short-term trading. For the long-term I am mindful the current global inflationary pressure is real and it may last many months or even years ahead. Therefore, my current investment mandate: • U.S. stock markets – To trade them • Commodities – To buy them Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises. For your reference: NYMEX Crude Oil $0.01 = US$10 Example: From $94.00 to $100.00 (10000-9400) x US$10 = US$6,000
NYMEX:CL1!Education
by konhow
1
US CPI Will Be Important For the USD and Cryptos-Elliott waveHey traders, Welcome to our new video analysis in which I will talk about Elliott wave bitcoin analysis as well as AMD stock and the USD. Keep in mind that USD and yields will define the direction of a lot of markets, even cryptocurrencies. So it will be important to keep an eye on Wednesday's US CPI report when speculators will have a better idea of what FED may do next. Will they stay hawkish, or will they slow down a bit? I hope you will enjoy the video. I appreciate your feedback in the commentary below. Grega
COINBASE:BTCUSD
by ew-forecast
US Recession? We will Sink at least 50% For a Recession.Between the 2008 great financial housing crisis, the end of the dotcom bubble in the year 2000, the 1970s stagflation recession, and the great depression of 1929 all have one thing in common. The market retraced at least 50% from it's peak. I personally believe the US economy is in conditions for a recession that will at least sink 50% or more if we were to compare to past indicators and technical conditions of a recession. Just my opinion take it with a grain of salt. At the end of the day past is no indicator of the future. However history doesn't repeat itself it often rhymes. There's been a lot of rhymes I'm seeing. Much peace, love, health, and wealth!
SP:SPX
by peacefuljustin
5
Bitcoin Where Are We? Still Some Pain On The Horizon. I don't believe we are out of the weeds yet and still have a ways to go with this bear market. The Federal Reserve's aggressiveness towards raising interest rates to combat inflation isn't the best conditions for a bull market in asset markets in general. We still haven't had any sideways movement with Bitcoin just yet and I don't believe we've found a true bottom either. We could rally up to $28,000 or $30,000 but volume is fading and it seems like the current rally is starting to stall out. There's a big possibility that we revisit a sub $20k Bitcoin in the coming weeks or months. If the United States continues it's trend of negative growth that will not translate well into the crypto markets. It's all about the cycles at the end of the day. The goal is to accumulate during the bear as close to the bottom as possible and ride the wave into the next bull cycle.
BITSTAMP:BTCUSD
by peacefuljustin
3
Reviewing Trends and their behavior during RecessionsWhile retiring after some decent gains during this whipsaw day, I thought I'd go over utilizing the Weekly trend indicator, and how that ended up during a recession vs the occasional downtrend signal. To recap the video if you don't feel like listening, the ONLY time a Weekly Downtrend Signal has occurred, and that index prices were lower when the Weekly Uptrend Signal occurred, is during the recessions. Even during the beginning of Covid, the Weekly Downtrend Signal hit at 2983, but the rapid rise back up and the calculation of trends would have signaled the Weekly Uptrend at 3276. An overall boost in the economy from here for the rest of the year would make this nothing more than a downturn. That doesn't really add up when looking at the overall state of the economy, at least not from my perspective. Many factors are worse than the last recession (Literally called the "Great Recession" because of how rough it was), and the next few months in terms of inflation falling without unemployment rising above 5% could be real factors to watch.
CME_MINI:ES1!
by SemperTrader
The Battle for Interest Rates: Tezos (XTZ) vs Ethereum (ETH2)Been writing a few long articles lately but the tl;dr of it is that now that interest rates are going up, the asset speculation market (real estate, stocks, venture capital, crypto/NFTs) is largely over and money will start to flow into financial products that provide more "reliable" returns - mainly interest rates. Given that the banks are dragging its feet in terms of giving people interest in their savings accounts, coins that offer reliable staking rewards will probably start to gain more attention as time goes on. I've been promoting the coin Tezos quite a bit lately since it's the coin that I feel like has the biggest long-term promise. They currently offer: 1) staking rewards (4.63% on Coinbase but higher if you stake them yourself) 2) on-chain governance (which most don't have, including Bitcoin and Ethereum) 3) people building/minting lots of things on top of it all the time, despite the dips in the market right now You probably remember me stanning for ETH since that's how I got my first successes is crypto, but to be honest they may be in trouble longer term if they don't do their merge sooner than later - gas fees are one thing but their decision to stick to off-chain governance models (basically trusting its users to make decisions behind closed doors) has been causing major issues in some projects, especially in DAOs. (Look up Brantley and ENS for an example of what happens with coin-based voting systems.) Whether I give up on ETH completely (I did sell off a pretty big chunk of it recently) will largely depend on how the Consensys merge goes this August and if they move towards or away from the ideals that they're advocating for all the time. They have a lot of catching up to do because #XTZ right now has all of the things they like to talk about already running. For the average person out there, what they're going to see is banks and crypto competing against each other in something that more people can understand: interest rates. Right now crypto is winning since they have the capacity to offer people better rates than the banks are - and can definitely win if they play their cards right. NFTs are still confusing for most people but one number being higher than another number is something that almost anyone can understand. You might even argue that this is the first time crypto is competing against the banks in a very direct way. The markets might look scary right now but once it settles down we'll start to see new patterns emerge with new ideas and products taking the scene.
COINBASE:ETHUSDLong
by RyanTanaka
2
Staking Rewards: The Best Hope for Crypto During the RecessionNews of record high inflation and the federal reserve's plan to increase interest rates this year has a lot of people worried that a recession (probably on a global scale) is coming this year. After over a decade of constant growth in the US stocks and real-estate markets, we're finally going to see the bubble pop. GDP is down, governments are broke, and I would argue that the "craze" of the last few years in stocks, housing, and even NFTs were driven by low-interest rates that encourage people to speculate rather than save - the act of buying "useless" NFTs, in a way, makes "sense" when compared to the alternative - earning almost nothing on savings and CD accounts. (The crypto "crash" we see in the last few weeks is a result of "crypto-curious" money exiting the space - most of which run in parallel to the fiat markets as a whole.) As interest rates get higher and higher over the next few months, however, that script is likely going to get flipped on its head. If the crypto industry adapts fast enough, they can take advantage of the fact that the banks are still dragging their feet in terms of offering better interest rates - staking rewards are currently outperforming the savings rates of most banks by a very wide margin and is a much easier sell to the average person out there just trying to protect their money. (The idea of buying NFTs of apes and rocks as your future nest-egg will start to sound more silly as time goes on, I think.) In a way this marks the end of the speculative-NFT era for the crypto industry, and possibly the end of the dominance of the proof-of-work model itself. Prior to the big "crash" a few weeks ago, many proof-of-stake coins Tezos (XTZ), Chainlink (LINK), Cardano (ADA) saw blips of independent movement as the rest of the market continued to tumble. If this trend continues over time (since these projects are actually offering something of value to its users - interest and real returns) we may start to see lesser-known contenders in the space rising to the top of the charts. (Ethereum is currently in limbo right now, at least until they finally do their ETH2/Consensys/"merge" in August - they've taken outsized losses this week due to the come-downs of the NFT craze.) As mentioned a few times before, Bitcoin may be in big trouble because the thing people are going to be looking for - interest rates - isn't something they're able to offer on any level, especially after the market goes into a downturn this year. All those years the mining community spent blocking money supply and block size upgrades may finally come back to bite them - the "flippening" may already be on its way. (And Ethereum too, if they fail to adapt to the new landscape - time will tell.)
GEMINI:XTZUSDLong
by RyanTanaka