Is a liquidity crunch about to sweep the crypto markets once more?
As mega crypto-coin exchange Binance has bailed out rival FXT, essentially Binance is trying to corner the crypto-market with their own 'coin' BNB. Please refer to the Chart 1 above, with Dogecoin and Bitcoin with Binance's BNB overlaid. All sold off on Binance's soon-to-be acquisition of FXT, which is probably insolvent, with the rival not rescuing the company per se, but rather acquiring its assets or in crypto speak, crypto's so called 'ecosystem', which is meaningless in its dialogue. More or less, the issue is; Do these exchanges have enough liquidity to maintain positions for their millions of users? Which is the main worry that regulators have for an unregulated crypto coin market.
Chart 2 shows the boarder picture of crypto's bear market.
A panic on Bitcoin could easily spill over to other crypto assets, as all these 'coins' seem to linked in some form or another, in a complex web of tethering to each other's exchanges, despite the fact that they are all being traded against the U.S. Dollar.
However, under the scourge of global inflation and the fact that Central Banks are allowing speculation to pour back in again, Bank of England comes to mind as one central bank that has indeed lost the plot in this inflation fight. Just look at the Sterling Pound, it is comical how they have allowed into to drop so significantly in the past year. All my Pound analysis can be found here: https://chiasmusmagazine.blogspot.com/search?q=pound. Maybe one cannot blame Bitcoin users and the lesser Crypto coins to be a hedge against inflation or at least thought to be a store of value. But, at the end of the day this maybe at your own peril. As these coins essentially hold no value.
Gold is an age old hedge against the end of the world.
Comments
Post a Comment