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Author Topic: THIS CRASH IS DIFFERENT than previous crashes... The FEDERAL RESERVE is why....  (Read 1570 times)
HardFacts (OP)
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June 18, 2022, 11:40:12 PM
Merited by JayJuanGee (1), Get-Paid.com (1)
 #1

Bitcoin has only existed in an era of MASSIVE MONEY PRINTING by the Federal Reserve, that started in response to the 2008 Financial Crisis.   When the Federal Reserve is printing money, stocks, and most other financial assets go up by a huge amount.   The best example of this is MARCH 2020, stocks and Crypto crashed on an epic scale ( Bitcoin 3000 ) when the economy basically shut down.   The federal reserve did a MASSIVE amount of money printing and stocks and other financial assets miraculously recovered in just a couple weeks.

Money printing and zero interest rates ( AKA:  FREE MONEY ) create huge speculations in worthless schemes that would never normally exist.  Tulip Mania, Dot Com Bubble, Zombie Companies that never make money, Cryptos, etc, etc.....

NOW:   Inflation is now very bad, forcing the Federal Reserve to raise interest rates and withdraw money from the system.   Now is the time when we see worthless companies and worthless Cryptos collapse.  Indeed, several crypto lenders have already collapsed and even more are in the process of collapsing.  The Federal Reserve must fight inflation and will NOT be saving the markets this time.  Bitcoin has ZERO intrinsic value, it is only worth what someone else will pay for it.   Without the speculative bubble of the past 14 years to support Bitcoin, will go close to its value of ZERO.

Bitcoin has NEVER seen an era of rising interest rates and tight money before.  This time IS DIFFERENT !!!!!  Ignore this fact at your own risk  Grin



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June 19, 2022, 08:40:48 AM
Last edit: June 19, 2022, 10:50:09 AM by o_e_l_e_o
Merited by Foxpup (3), pooya87 (2), hosseinimr93 (2), Ultegra134 (2), BlackHatCoiner (2), Poker Player (2), JayJuanGee (1), Haunebu (1), lionheart78 (1), Gyfts (1), DdmrDdmr (1), ChiBitCTy (1), KrispyKrypto (1)
 #2

Oh hey! Haven't seen you since the last crash. You know, when you were busy defending the guy who said his "computer forgot his password", lol. I was starting to worry that something had happened to you.

I'm still waiting for that sub $1k bitcoin you promised so many times. I've got a stack of fiat just sitting here for the last 3 years slowly rapidly devaluing waiting to buy in! $1k is definitely coming this time, right? Does Peter Schiff promise? Roll Eyes

Money printing and zero interest rates ( AKA:  FREE MONEY ) create huge speculations in worthless schemes that would never normally exist.
Absolutely it did. And now we are seeing all these scam shitcoins, NFTs, and DeFi nonsense exit scam and disappear. Bitcoin will be just fine though, don't worry.

Indeed, several crypto lenders have already collapsed and even more are in the process of collapsing.
Good. These companies are fractional reserve centralized scams. Guess what hasn't collapsed? My wallet software or my private keys. The sooner everyone gets their money off these platforms and in to their own wallets, the better.
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June 19, 2022, 09:43:08 AM
Merited by JayJuanGee (1)
 #3

Have to agree with the OP, regardless of how he "behaved" in this forum by defending someone or not, this is irrelevant.

The interest rates and the era of the big crash of Lehman Brothers, where some even UK banks collapsed (Northern Rock, Kaupthing Isle of Man and others) - during this time the investors, the hedge funds, the institutions - they got used to "cheap money" i.e. printing money endlessly, with 0 interest rates given.

Now times are changing, the rates are up, the costs of living are skyrocketing globally - hedge funds want the US dollar, as much as it represents so much debt, the US isn't going anywhere, it's here to stay for at least another century or half of it.

The dollar has value with this debt, the debt is being carried over many years and investors can get nice returns if they invest in government bonds (i.e. treasury bonds):

https://www.bloomberg.com/markets/rates-bonds/government-bonds/us

These are safe returns, and can be speculative (i.e. you don't only gain 3%, you also gain appreciation of the currency), nonetheless 2.8% in 1 year is quite nice, it sounds low for many but the era of "cheap money" is pretty over.

So investors prefer it this way, also the tensions in the world (Russia Ukraine and now Russia US) and other issues as well as fear all bring "flight to safety" - it could stop at some point, but right now it feels like a shift and not a process that wants to stop.

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June 19, 2022, 09:50:28 AM
Merited by o_e_l_e_o (4), Foxpup (1), JayJuanGee (1)
 #4

You do realise that you aren't really smart, don't you op? If you were, you wouldn't call yourself 'Hardfacts' which is cringey and you would actually learn from the mistakes that you made related to criticising BTC in the past.

Here's a fact for you. The entire cryptocurrency market isn't completely dependent on the US government or the Federal Reserve even though it does get influenced to a certain extent now and then.

BTC is a cryptocurrency that always bounces back no matter what which is another fact that I have learnt over the years.

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June 19, 2022, 09:52:12 AM
 #5

Bull crap.

Bitcoin is still running strong just like it has been doing for more than 10 years. The price means nothing. The fundamentals haven’t changed. 1btc = 1btc. Who gives a flying cocktail about the dollar anyhow?

These high interest rates will only kill the dollar and when it happens, bitcoin will take over. Powell can’t risk this so soon he will chicken out and lower the rates again. Then bitcoin will go above $200k.

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June 19, 2022, 10:32:43 AM
 #6

Powell can’t risk this so soon he will chicken out and lower the rates again. Then bitcoin will go above $200k.

If anything, the rates will only go up further.

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June 19, 2022, 10:57:12 AM
Merited by Foxpup (2), tadamichi (1)
 #7

The interest rates and the era of the big crash of Lehman Brothers, where some even UK banks collapsed (Northern Rock, Kaupthing Isle of Man and others) - during this time the investors, the hedge funds, the institutions - they got used to "cheap money" i.e. printing money endlessly, with 0 interest rates given.
There is no doubt that the rampant fiat money printing helped to drive the last bull run up to $60k, but it is hardly the only reason. Sure, without it the price will dip as we are seeing, but it isn't going anywhere near zero. The fundamentals of bitcoin haven't changed and bitcoin will continue working just fine.

These are safe returns, and can be speculative (i.e. you don't only gain 3%, you also gain appreciation of the currency), nonetheless 2.8% in 1 year is quite nice, it sounds low for many but the era of "cheap money" is pretty over.
When inflation is 8.6%, your 2.8% returns are actually a ~6% loss.

Here's a fact for you. The entire cryptocurrency market isn't completely dependent on the US government or the Federal Reserve even though it does get influenced to a certain extent now and then.
Nope, sorry. America is the only country in the world. Everyone knows that. Roll Eyes
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June 19, 2022, 11:30:09 AM
Last edit: June 19, 2022, 03:53:20 PM by BlackHatCoiner
Merited by Foxpup (2)
 #8

Bitcoin has NEVER seen an era of rising interest rates and tight money before.  This time IS DIFFERENT !!!!!  Ignore this fact at your own risk
Higher interest rates favor the savers and disfavor the borrowers. It reduces, first, productivity and, later, consumption. However, I'm not sure there's a strict correlation between those two and bitcoin. Aren't many using bitcoin as savings and/or store of value?

Bitcoin has ZERO intrinsic value, it is only worth what someone else will pay for it.
That's true for everything. Food is worth what people are willing to pay for it, gold is worth what people are willing to pay for it, cars are worth what people are willing to pay for them. It has nothing to do with intrinsic value.

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June 19, 2022, 11:49:02 AM
Merited by o_e_l_e_o (8), JayJuanGee (1)
 #9

Bitcoin has NEVER seen an era of rising interest rates and tight money before.  This time IS DIFFERENT !!!!!  Ignore this fact at your own risk
Higher interest rates favor the savers and disfavor the borrowers. It reduces, first, productivity and, later, consumption. However, I'm not sure there's a strict correlation between those two and bitcoin. Aren't many use bitcoin as savings and/or store of value?
It’s not correlated, because Bitcoin still outperforms any interest rate a bank could offer.

The people that would put their money into the bank for interest(for a loss because it still won’t outperform inflation), will be the people who buy Bitcoin last anyways. So i dont think it influences the demand side that much.

The only effect it would have, is that speculators can’t easily ape into Bitcoin or any other investments with borrowed money. Which would probably favor Bitcoin, because the market would be more hesitant to get into braindead projects or empty hypes. So higher interest rates could actually favor Bitcoin, and for sure won’t hurt it.

And as we saw now, it’s better for Bitcoin if people don’t leverage too much into it. We don’t need actors like celsius bringing down the whole market, because they gamble too much.

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June 19, 2022, 12:42:55 PM
Merited by JayJuanGee (1)
 #10

Bitcoin has NEVER seen an era of rising interest rates and tight money before.  This time IS DIFFERENT !!!!!  Ignore this fact at your own risk
Higher interest rates favor the savers and disfavor the borrowers. It reduces, first, productivity and, later, consumption. However, I'm not sure there's a strict correlation between those two and bitcoin. Aren't many use bitcoin as savings and/or store of value?
It’s not correlated, because Bitcoin still outperforms any interest rate a bank could offer.

The people that would put their money into the bank for interest(for a loss because it still won’t outperform inflation), will be the people who buy Bitcoin last anyways. So i dont think it influences the demand side that much.

The only effect it would have, is that speculators can’t easily ape into Bitcoin or any other investments with borrowed money. Which would probably favor Bitcoin, because the market would be more hesitant to get into braindead projects or empty hypes. So higher interest rates could actually favor Bitcoin, and for sure won’t hurt it.

And as we saw now, it’s better for Bitcoin if people don’t leverage too much into it. We don’t need actors like celsius bringing down the whole market, because they gamble too much.
There's no reason to compare bank interests with Bitcoin's performance. Banks offer a stable or floating rate for your investment/deposit every 3/6/12 months. Bitcoin on the other hand, doesn't guarantee you a certain percentage of performance, but the possibility to rise in the future. It can't guarantee you that it'll earn its money. History has shown that the probabilities of recovery are decent, however, you're not earning an X amount per Y days/months. It's an asset similar to how stocks perform.

Don't get me wrong, bank's interest is close to zero and can't outperform the yearly inflation rate.

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June 19, 2022, 01:33:40 PM
Merited by o_e_l_e_o (4), Foxpup (1), JayJuanGee (1)
 #11

Banks offer a stable or floating rate for your investment/deposit every 3/6/12 months.
Yes, but it's not enough. Offering me ~3% in returns when there's a nearly 10% inflation in my country does only make me poorer.

Bitcoin on the other hand, doesn't guarantee you a certain percentage of performance, but the possibility to rise in the future.
And nobody guarantees you that the value of the dollar, the euro, the pound will continue as is. It might rise, it might fall. But, nobody knows for sure. Same goes for bitcoin. However, during the last 10 years, bitcoin has risen by more than 180% in every year, on average, while the fiat currency I use has a cumulative inflation of 18.58%, from 2012 to present.

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June 19, 2022, 01:49:37 PM
Merited by JayJuanGee (1)
 #12

Bitcoin has NEVER seen an era of rising interest rates and tight money before.  This time IS DIFFERENT !!!!!  Ignore this fact at your own risk  Grin

Yeah, it's different, BTC never had a threat of recession on its tail because it emerged on the tail end of the last one. But that doesn't tell us much by itself. I doubt this will be an end to crypto or BTC, it may weed out the shitcoins, but the major players have some solid ground to stand on. What we might see is a bit longer crypto winter than it was previously thought of, and that's understandable, it's a shitshow all around the world and BTC is not immune to such economic trends.

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June 19, 2022, 03:29:38 PM
Merited by vapourminer (2), Welsh (2), JayJuanGee (1), tadamichi (1)
 #13

Which would probably favor Bitcoin, because the market would be more hesitant to get into braindead projects or empty hypes. So higher interest rates could actually favor Bitcoin, and for sure won’t hurt it.
And so the cycle repeats. I remember back in in the 2017 bull market where people were throwing money left right and center in to every completely pointless and stupid ICO that came along. The ICO bubble burst, the whole market crashed, 99.9% of those shitcoins died and were never heard of again, and bitcoin just kept going as it always does. This time round people threw their money away on picture of monkeys, shitcoins like Luna, and scam centralized platforms like Celsius. But bitcoin will keep going as it always does.

Banks offer a stable or floating rate for your investment/deposit every 3/6/12 months.
But as you say, it can't outperform inflation, which can rapidly spiral way out of control as we are currently seeing. You might end up with more fiat than you started with, but the purchasing power of that fiat will be markedly reduced.

it may weed out the shitcoins
Let's hope so!
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June 19, 2022, 03:34:44 PM
Merited by JayJuanGee (1)
 #14

And so the cycle repeats. I remember back in in the 2017 bull market where people were throwing money left right and center in to every completely pointless and stupid ICO that came along. The ICO bubble burst, the whole market crashed, 99.9% of those shitcoins died and were never heard of again, and bitcoin just kept going as it always does. This time round people threw their money away on picture of monkeys, shitcoins like Luna, and scam centralized platforms like Celsius. But bitcoin will keep going as it always does.
Interesting point, that I hadn't come to the conclusion of. I'm a big believer in correlation doesn't mean causation, but this is quite a good way of looking at things. I remember how mad the 2017 craze of ICOs was, I mean we're still recovering here on the forum from the amount of spam that invited in, but also the effect it had on cryptocurrency adoption.

Although, I didn't make the connection of the recent NFT, and other shit coins that have been peddled recently. So, while on one hand it doesn't look like the market is following the exact same pattern that some people claim it to be, it does have some interesting deja vu with the ICO, and NFT craze.
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June 19, 2022, 03:39:00 PM
 #15

Banks offer a stable or floating rate for your investment/deposit every 3/6/12 months.
Yes, but it's not enough. Offering me ~3% in returns when there's a nearly 10% inflation in my country does only make me poorer.

Bitcoin on the other hand, doesn't guarantee you a certain percentage of performance, but the possibility to rise in the future.
And nobody guarantees you that the value of the dollar, the euro, the pound will continue as is. It might rise, it might fall. But, nobody knows for sure. Same goes for bitcoin. However, during the last 10 years, bitcoin has risen by more than 180% in every year, on average, while the fiat currency I use has a cumulative inflation of 18.58%, from 2012 to present.
3%? That's a lot, in the best case scenario the best you'd get is 0.50%-1%. No one can guarantee you anything, 10€ in 2012 isn't worth 10€ in 2022. Our purchasing power has been severely affected the past few months due to the rising inflation. Bitcoin on the other hand, despite the crash, is still worth more than it was worth in 2019-2020.

Staking in such cases can provide more guaranteed results in terms of investment, usually surpassing 10-15% APY. And could possibly balance inflation in a way.

R


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June 19, 2022, 03:44:53 PM
 #16

I'm a big believer in correlation doesn't mean causation
Absolutely. But the similarities are striking. There is an endless stream of people who are looking for the next get rich quick scheme, and a similarly endless stream of scammers who will exploit this mentality. I'd bet that at some point in the next 3-5 years during the next major bull run that NFTs are all but forgotten, and there is some new exciting, shiny, and ultimately useless craze which will result in a lot of people losing a lot of money.

Staking in such cases can provide more guaranteed results in terms of investment, usually surpassing 10-15% APY.
Go and ask all the people who were getting 20% returns on Celsius how "guaranteed" their returns are. The fact is that nothing which is offering those ridiculous returns is risk free, as thousands of people have recently found out by losing everything.
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June 19, 2022, 03:56:36 PM
Merited by JayJuanGee (1), Haunebu (1)
 #17

Not this guy again  Roll Eyes

Where are these trolls and paid shills when the price are booming? Their drivels means nothing when the price of Bitcoins recover, so they wait like a bunch of vultures to feast when the price goes down.  Angry

Bitcoin is the "Microsoft" of the Crypto currency world..... and Shit coins & NFTs are the "Mom-and-pop" shops that goes bankrupt, when there are economic hardship in the global economy.

The best thing about posts like this... is when we hit all-time-high prices, then we rub it back in their faces ..when they hide in their little troll caves.  Wink

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June 19, 2022, 04:02:15 PM
Merited by JayJuanGee (1)
 #18

Well, you could argue that every moment in time has its unique conjunctures. As to my knowledge we never had a pandemic followed so closely by a break in political relations and a full-on economic war between the most powerful "empires" of the world. Yes, Bitcoin has never passed through this combination of events, BUT it has taken bigger hits and came back up like nothing happen.

From my perspective this is just another test for the allegedly best store-of-value asset the humanity ever had. We need to take into account that the big fortunes are made in recessions. The deep pockets know* how to play with the emotions of the crowds. Bitcoin's liquidity is still on the lower side and in combination with the high leverage used by many players (often retail) produces big dips in price.

It will take time for Bitcoin to become more resistant to the economic cycles, but Rome wasn't built in a day and good things take time. Zoom out if you're in doubt Wink
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June 19, 2022, 04:48:37 PM
Merited by JayJuanGee (1)
 #19

There's no reason to compare bank interests with Bitcoin's performance. Banks offer a stable or floating rate for your investment/deposit every 3/6/12 months. Bitcoin on the other hand, doesn't guarantee you a certain percentage of performance, but the possibility to rise in the future. It can't guarantee you that it'll earn its money. History has shown that the probabilities of recovery are decent, however, you're not earning an X amount per Y days/months. It's an asset similar to how stocks perform.

Don't get me wrong, bank's interest is close to zero and can't outperform the yearly inflation rate.
To me there’s a reason to compare it, because in my opinion markets will take all possible options into account, to save their money. We see huge fluctuations in the short term, and in the short term the best asset varies. But for long term investors this doesn’t matter as much, there’s a reason Bitcoin is the best performing asset in the long term, it doesn’t just happen accidentally for over a decade. And we know there’s no guarantees, but doing nothing will guarantee a loss of all the time we spent working, for nothing in return. Bitcoin is risky, but fiat is more, and the market will just take the risk into account, it won’t hamper demand.

When i first got into investing i considered every possibility there is, before i even really knew about bitcoin. I compared everything from taxes and other factors(also the state of fiat) of each asset class, and my conclusion was Bitcoin is the best investment there is. No one introduced me to it. And other players in the market will act similarly. And then only after this, i learned what Bitcoin is really about.

And you’re right, you're not earning an X amount per Y days/months, but the reality is, at the banks you're actually loosing an X amount per Y days/months. There’s no reason for the majority of the market to bring their money back to the banks, first it’s a secure loss, second people know how unstable banks are at the moment (with no sign of betterment). Just because regular people are still asleep, doesn’t mean the market is.

Bad times are the best test for how strong something is, this is also a chance for Bitcoin to prove itself, for people who were unsure before.

Staking in such cases can provide more guaranteed results in terms of investment, usually surpassing 10-15% APY. And could possibly balance inflation in a way.
If banks can’t even provide you 1%, what makes you think other projects can do this sustainably?

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June 19, 2022, 05:14:33 PM
Merited by tadamichi (1)
 #20

Bitcoin has NEVER seen an era of rising interest rates and tight money before.  This time IS DIFFERENT !!!!! 

So the Fed closing the gate after the horse has bolted should be concerning to us?  All they're doing is making a feeble attempt to slow their economic freefall.  They aren't turning anything around.  And they'll abandon "tight money" the moment it suits them.  I give it two years tops before the rampant printing resumes.

Consider me "warned".   Roll Eyes

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