Crypto lessons I learnt this Crypto winter
While we are in a school or college we have a a set syllabus and we are tested from the set curriculum.
However in life there is no fixed syllabus and life can throw any number of bouncers and out of syllabus questions to you.
When crypto was doing well I was putting some money into my tiny crypto piggy bank to save for the future.
However the current difficult crypto times have taught me innumerable lessons that I share with you on this blockchain platform in the hope that perhaps you could benefit from the info.
What I believed about crypto
BTC and crypto is not an asset class that you can ignore or brush off as being insignificant for the world economy.
That being said it is interesting to observe how BTC and other crypto prices move w.r.t the fiat world and what can be the possible triggers for it to rise or fall.
Take for instance the movement of tech stacks. Invariably when the tech stocks correct in this bear market so does btc and other crypto.
That being said the Fed's decision to hive interest rates tends to squeeze the money from the economy and this makes money move to relatively risk off asset classes.
A crypto correction can be an opportunity
If you look at the history of BTC and its price movements deep corrections are not uncommon.
However what is different this time round is the level of exposure institutions and the big names in the financial world are showing interest and participation in the crypto space.
So with this level of participation and holdings one would expect more stable price and support for BTC.
However we all know how the LUNA stable coin crash spooked the markets and has cause some serious irreparable damage.
how to see if the money moves out of crypto markets ?
Normally how money moves in the crypto space?
When big players see a correction coming by way of algo triggers being generated or what ever mode of observation they use to track the markets and the charts.
Money moves from various crypto projects to the stable coins.
Though there is some money which also moves to the fiat world which happens to be the other side of the fence.
However those seeing this as an opportunity to sell high and buy low would tend to sell crypto for stable coins and hold their stable coins till there is a favorable buying opportunity and then they can move back to main stream crypto like BTC, ETH or the altcoin projects they support.
Monitor the stable coin marketcap
However this time round when the crypto kept falling the market cap of the stable coins did not move much in proportion or was mostly sideways indication an exit of money from the crypto to the fiat space.
For any trader or crypto holder this is never the first choice because it is not always easy to get back from fiat side back into crypto space without paying a significant entry fee or taxes for the transactions.
Alts coins are not yet decoupled with BTC & ETH
When BTC and ETH fall the the alt coins fall much harder.
There have been seen so many times and similarly when there is the recovery BTC, ETH spearheads a recovery and the alt coin recovery happens much later.
Not your keys not your crypto
All those centralized crypto fintech's like Three Arrows Capital and its like that went down like the titanic reconfirms that no one is infallible and unfortunately the crypto space lacks the transparency and level of responsibility one would expect from a credible financial institution.
So hold your funds in wallets for which you have the private keys.
My Closing thoughts
How crypto money moves in a meltdown may indicate how long the crypto winters might last.
Stay safe and hope you manage your finances well to support yourself and your loved ones.