Gooooooood morning lions I hope you're feeling alot better today now that markets are returning, It's always a good feeling opening up an exchange website and seeing market confidence return with all things turning green.
We'll touch a bit on that later on in the post but I'd like to focus on the current economic geopolitical battles undergoing between then United States and China. The modern day space race and it's quite interesting.
It was previously reported by CNBC that China has launched their digital Yuan and had been trialed in a number of its cities.
It is a central bank developed and operated initiative and for China which is run both as Neo Liberal and Communist through a two tiered system I would anticipate to be a state controlled currency. As it is tethered to their physical currency it would be state controlled.
It's been reported to be a success and wide spread adoption is currently being rolled out. It will also be able to purchase cryptocurrancy on exchanges with. For anyone in this space it is both a danger and the safest token/coin in circulation.
Where many tokens are pegged but not run by governments they are all at risk of failure with no one to buy back or provide 100% security. The Yuan enters the market with that 100% certainty that a government will be backing it up and regulating its value. The ultimate safe coin, but with China's economic record and plays of manipulating its economy and it's dollar to bypass tariffs and ensure cheap exports this model will greatly impact on the coins value. But it would still be the safest in the game.
This also provides China with an economic advantage and entry into Bitcoin dominance, massively over value the digital Yuan, buy up a heap of Bitcoin, dump the tokens value than sell the Bitcoin. Rinse and repeat and China holds the cryptocurrancy market and all the wealth.
The fact that the Yuan is backed by China's central bank and is a recognised, accepted and legal currency. This destroys Ripple, this destroys Stella, this destroys most projects that are attempting to achieve what China just did.
A risk to anyone and everyone.
Entre Uncle Sam
Today the US Federal Reserve released a press Release announcing it's discussion paper on developing a US Central bank backed digital currency to enhance electronic payments.
It's important to note that this research is already being undertaken and there already are plans to do this. A digital US dollar impact USDC, USDT and every other US pegged cryptocurrancy. A digital US dollar that is pegged and backed by banks is market confidence and stability.
But it's not cryptocurrancy, oh but it is and to the majority they won't care who is running it, just that it is safe and stable and provides them an in to the market to play with and legally.
The question is, will exchanges list it? That's easily answered. Will exchanges have an option not to? US has already been providing legislative pressure onto exchanges and from looking on the outside it doesn't appear they are trying to shut them down. More they are exerting their power to say "we're here, we're watching, we are in control not you". If the US wanted something shut down, not a hard thing for it to do.
So it looks like that we are witnessing our very own space race but with a focus on electronic or digital finance. As the saying goes, those who control the money, control the wealth and control the world.
I think there are some significant risks to block chain projects in the coming years and the relevance, use and need of stable coins will be one of those industries that will be the first to fall. But in return block chain users will get a stronger, safer and faster network. A good trade off and the people that benefit from two nations in a space race are the people.
What an absolutely dogs breakfast of a week it has been in cryptocurrancy, watching everything dive massively. Reminded me of COVID and I believe the liquidations were just as bad if not worse as market cap is alot bigger.
Noting that Matic through this period actually saw growth and wasn't impacted by the fall. Stable coins also saw massive volume as investors flocked to retain their falling prices.
Major cryptocurrancies saw dips between 30% - 50% with what became a buyers market. Reported in Decrypt it was retail traders that caused this week's crash which was greater than March 2020 and the commencement of the COVID Crash.
Retail investors are smaller investors or what I would refer to as mum and dad investors. People with smaller income that make smaller trades bit by bit through am exchange.
Now this is an interesting turn of events and shows that Whales are beginning to not be the influences of cryptocurrancy nor the ones to profit. A massive $6billion US dollars was dumped causing one of Bitcoins biggest dips and it's flow on effects impacting the entire cryptocurrancy ecosystem.
Block Chain is changing and we can already see from data provided that the industry is becoming dominated by smaller investors adding up to alot more money than traditionally seen.
I want to touch base on RFI and this form of defi will appeal to these smaller investors. Token price for RFI will climb slower but also has the ability to moon. It will moon if thousands of people trust in it as its supply can not be controlled by ONE or Two whales. It relies on market confidence and trust.
But again, ease of use and access is the MAIN driver for token price. Centralised exchanges still remain the preferred purchase location for thousands of people. Quick, easy and done. There are still alot of people holding their tokens on exchanges, I'd anticipate this to be because people are making smaller weekly purchases building their account values to a point they can make a transfer.
It's amazing, if only the stock market had of allowed this model the chances of us sitting here right now would be slim.
People aren't preoccupied about what is what and who is who. They're building their wealth for retirement and a better quality of life. It is only a matter of time before tech advances occur, competition arises and the game changes.
China and the US's latest space race in the cryptoshphere will undoubtedly usher in the next age of block chain tech and advancement.
You don't go pumping billions of dollars into establishing a digital currency and just leave it there. No, that's just the first step. The next step is the adoption systems and use cases.
Interesting times a head.
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