I checked the effect of past FED rate hikes on the Bitcoin price, it didn’t immediately affect the price. It caused a minor surge 3 out of 4 times but nothing major, no trend reversals within two weeks. You can get historic Bitcoin price data at CoinMarketCap. The Bitcoin price went up by 4.5% to $39.700. Nothing earth shattering there.
I was about to launch my own token but I reconsidered. Mainly because the token had no actual utility :) and apart from that, I am not sure what the macro economic direction of the market will be. We have a rather high inflation throughout the West, we have supply chain problems, we have an emerging Russian gas and oil problem in Europe, an angry Russian Bear on the loose babbling about World War III and throwing nukes around the place. In the USA marketplace, the FED are cutting back their bond buyback and liquidity support program and raising interest to rein in inflation. That all reduces the liquidity in the stock market and also crypto market. Which seems to have been factored in already. Last month saw a 20-30% drop in the prices of the main tokens and coins. The NFT volume is down 92% from its ATH, the hype is over. The stock market had their worst three months in 50 years.
Question remains what the crypto market does, the historic crypto cycle is 3 to 4 years, if history repeats itself we are entering a 2 year bear market. Everything is basically dirt cheap, half price, but you won’t be making any big profits. A bad time to launch a token and a very good time for stable coin yield farming ;) my pick for this half year, 20% APY BUSD stablecoin yield farming.
The dollar is strong compared to the euro and it will take until July before the ECB actually acts the main problems are only getting worse in Europe, so I expect the dollar only to get stronger.
Choice stress and market dilution
The coins business back around 2014 was a lot easier, it was a smaller market with a lot less options. Ethereum was a sure shot. The only project with an actual new idea after Bitcoin. I waited a few months after it launched to see if their team were for real and would deliver the goodies and see if the project would gain traction, if people were buying, it did, the market liked Ethereum so I bought in for 85 cents. The entire market then soon jumped on Ethereum and the rest is crypto history.
There is a new major blockchain project every three months now, and the market is strongly diluted. Apart from the (rather boring) blockchain coins, we now have DeFi with smart tokens, DEXes and yield farming, and now NFT’s, it is such a wonderous world. But with many options comes choice stress. And the market is diluted. I usually buy what I figure the market is gonna be buying, that is the general idea behind the trading game. But with all these options it is getting harder to pick the winning projects.
And with the emerging possible long bear market, due to the lower liquidity and higher inflation (people just need more cash to buy bread) there are no clear shooting stars. And serious, I have been trolloping around the market place for the past six months, busy developing a token and stuff, checking out the startup scene, but I am now taking some time and I am finding the real profitable reliable gems in the market place.
I am not so much interested in the NFT hype scene, I am currently looking for some gimmicks that will bring in profit in a long bear market.
I put my money in a 20% APY BUSD yield farming deal and that generates some cashflow per month to invest in higher risk projects. That was the idea behind my token, a nice juicy stable coin farming fund to slowly but steadily generate some money to invest in higher risk ventures. I can do that as token, but nobody is really buying at the moment.
Time to do a bit of coding
And well as said, my would-be token didn’t have much utility. I can outsource and buy it but I would hate not mastering the tech stack myself. With the market possibly slipping into a 2 year bear market, I have plenty of time to dig into Solidity coding, NodeJs, ReactJs, NextJs, make some friends in the developers corner and join a team. The projects are getting more complex, and you basically need a nice team to make any kind of actual impact in the marketplace. Me being a business economist (and veteran crypto jockey), I do think I can make a nice contribution to a lot of teams. But being a bit of a nerd, I also want to do some coding :)
A pancakeswap clone costs 700-1000 dollars on Fiverr. I might just do that, and setup my own DEX. A private DEX ;) So I can play with the tech stack a bit. I have been thinking about setting up a Green exchange, projects with a positive environmental limpact. With a ‘green’ Cake token. That is a nice niche in the market place. It also prepares for more integration in the existing economic system. Green projects have a bigger chance at getting subsidies from the governments, cashflow from the ‘real economy’. That makes them less dependant on the whims and bull-bear cycles of crypto. That makes them an attractive investment opportunity. And the Green Cake token would immediately have its utility. You could blow a beautiful gigantic bubble with it :) I love bubbles…
But that is an idea for next year, I think. I am just gonna sit back, do a bit of coding, and rake in the stable coin yield farming silverpennies. As said, you can buy most tokens cheap and if my market expectations come true, the market will drop another 40-50% in the next half year. So the goodies only get cheaper and cheaper…
