GLOBAL DEVELOPMENTS
There was much talk in the news during October about CBDC’s (Central Bank Digital Currencies). We know that both Sovereign States as well as Central Banks around the world, are struggling to find solutions to the global financial situation.
We have mentioned before the Digital Yuan in China, but it is now clear all Central Banks are working on their own. These of course have nothing in common with Cryptocurrencies but influence the space for digital financial assets.
“The limited roll-out comes a day after Singapore’s monetary authority unveiled trials of a digital version of its local dollar. The central banks of China, the euro area, the Bahamas and others have been experimenting in the field, while many others are examining ways to quell the threat to financial stability from private digital currencies.” BLOOMBERG
The last line of Bloombergs analysis is telling - quell the threat to financial stability from private digital currencies. This is a recurring theme that will be pushed by the central bankers. The logic is that Private digital currencies, like bitcoin or Stablecoins, are becoming so popular that if something goes wrong, it could cause significant issues in the global financial system. By going wrong, central bankers mean that central banks and other related regulators don’t have any control or oversight.
HOW DO THESE DEVELOPMENTS AFFECT BITCOIN AND OTHER CRYPTOCURRENCIES?
Firstly, Satoshi’s Bitcoin White Paper (exactly 24 years almost to the day) made it clear these are the times Bitcoin was designed for.
Why? The decentralized monetary network of bitcoin allows for anyone to see what is happening at any time. Stablecoins also allow for the evaluation and audit by anyone at any time. Quite literally, the crypto financial system is more transparent from a transactions standpoint than any other financial system and the Bitcoin Blockchain now seems the most secure network on Earth.
IS THE BOTTOM IN.
We have stated for too long now that we await the bottom. The Smartest Investor buys assets when at their cheapest.
Below is a Weekly BTC chart showing very similar bottom signatures between 2018 and 2022.
We constantly monitor dynamics in the space, and this time we will focus as always on Bitcoin, Ethereum and Level 1 Protocols. We will also cover what we consider the strongest DeFi Projects, but now also take positions in both Metaverse and GameFi projects and the Platforms on which they are built.
As always with the fast evolution of the Space, some of these Platforms cater for projects that overlap a number of these areas.