Wall Street, and the markets in general, are breathing a new positivism, because the uncertainty surrounding the presidential elections in those is dissipating as the difference between the two candidates is widening in the polls. Which means that the risks of having closed results are being diluted. That has been received as excellent news, because it means that there will be no transition problems. Nobody wants a political problem around the validity of the results. Thus, the possibility of a resounding victory has brought great optimism.
Now, let’s talk about this week’s most read crypto news.
Personally, I have no experience with GoodDollar, because I am not a user. Frankly, I’m not interested. Suddenly, it is the phrase “free money” that predisposes me to think that everything is an elaborate scam. I dont know. It seems to me that it is that type of elaborate schemes that, sooner or later, end in disaster. DeFi mania is sometimes too much for my liking. I don’t doubt that there are people making money on it. But it’s not my style. I prefer simpler businesses, with less euphoria.
Now, in these matters it is not uncommon for us to be victims of our prejudices. In other words, we cannot mistrust everything new. That would be going against innovation. While it is true that there are bad schemes, it is also true that good deals are not all the same. We must be open to paradigm shifts. The old models are a guide, but we cannot close ourselves to the new.
In other words, between skepticism and naivety there is a third way: The caution. What he means is that we must study these new projects very carefully. As a general principle, we must give new projects the benefit of the doubt. However, that does not mean that we should accept them without questions. The smartest option is thorough research. That is, we must do the homework before investing. It is a mistake to be delusional. But it is also a mistake to be obtuse. It is best to be demanding, but open.
In my opinion, things must be called by name. Efforts to put everything under a lens that fits a particular narrative sometimes goes to extremes. Few have the courage to admit that the injection of liquidity by the company is the main responsible for the recovery of prices in financial markets during this crisis. Bitcoin included. So, it is said that Bitcoin is “decoupled from traditional markets”, because it shows a negative correlation with it and a positive one with it.
These desperate attempts to present Bitcoin as an anti-establishment movement sometimes reach absurd levels. That doesn’t make sense to me. Who are we kidding? The objective of monetary stimulus is to weaken the dollar precisely to raise the price of assets. That is the point. The crisis lowers prices and stimuli seek to raise them to help the recovery. Of course, the weakening of the dollar is related to the rise in prices in the markets. That is the intention. Liquidity injections increase demand. And demand inflates prices.
It is not quantum physics. In fact, it is very simple. Ah, but we can’t say that. We must color everything with the usual conspiratorial tone. “Bitcoin is unlinked” “The negative correlation with the dollar.” Wall Street is much criticized, but at least there they are more sincere in this regard. They applaud stimulus and celebrate when stock indices rise in value because of it. In the Bitcoin community, the matter is discussed in a dishonest way with pathetic cant inflated to accommodate (forcibly) an old narrative. He is like the boxer who lost the fight, but instead of admitting defeat, he tells everyone that with his face he fiercely hit the hands of his opponent. Victory is actually yours. Seriously? Who are you kidding?
If the crypto market wants to grow, it should expect much more scrutiny from the authorities. Much is said about the arrival of institutional capital. And much is said about the importance of institutional capital for the future of Bitcoin. But what is institutional capital? One way to put it is that it is other people’s money managed by specialists. In other words, the public that trusts others. And I am afraid that this public only has the law as a guarantee.
In the Bitcoin community it is said that in a few years the total capitalization of Bitcoin will equal the capitalization of the, which orbits close to 8 trillion dollars. The only way to achieve such figures is with the participation of institutional capital. , funds, pensions,. Would it be realistic to expect that a large fund will not require more scrutiny from regulators? Let’s say that the United States Social Security, the Federal Reserve, the mayor of, the Government of California, the police syndicates of decided to invest in Bitcoin. Will regulators allow a Wild West?
The most radical bitcoiners speak of trillions of dollars per unit in a few years. But at the same time there is talk of a total libertarian paradise. Is this realistic? I am afraid that along the way we must make certain concessions.
The role has its costs. Now that Bitcoin has come out of the shadows we cannot pretend that we will have the same freedoms as before. We forget that even the most liberal tax havens must abide by certain rules. Bitcoin is going to have to find its place. I don’t think the regulatory end of currencies will be reached, but it surely won’t be no man’s land today.
Well, there has been an exchange control for a long time. That is not new. The dollar market has always been a black market. Currency exchange has been an “illegal” activity for many years. The process of “dollarization” in Venezuela is a kind of citizen movement. It is not official. It has always been something “clandestine”. Of course, the Venezuelan government is not very consistent with its measures. And the official discourse is ambiguous and changing. But Venezuelans are used to this. Suddenly, this new announcement is made to intimidate the banks for some hidden agenda of the regime. I dont know. In Venezuela, everything is strange. And nothing is clear.