I did a video version of the editor's pick idea (link below) with more details and a more holistic look at what's been going on in real-estate, politics, and crypto.
What happens next is anyone's guess but underlying trends tend to show that the crypto market itself will probably be OK, if not bullish. Some notes from the vid below:
- Inflation is here to stay in the US, China’s inflation is very low right now (below 1% with up and down trends, the US is 5.4% and steadily climbing) and is more likely to recover more smoothly in the long run if they allow Evergrande to default on their loans.
- The United States was caught off guard by inflation warnings because they have outsourced most of their manufacturing overseas over the last few decades -- out of sight, out of mind. (They refused to consider increasing interest rates or lower gov spending until very recently.)
- Crypto is an “inflation friendly” asset because its price is adjustable and is not beholden to supply chain issues.
- China’s ban on Bitcoin and other assets are pretty typical of the politics there, but savvy Chinese investors often invest in foreign assets as a way to dodge taxation and political entities taking control of their assets. This includes real-estate, but also things like cryptocurrencies.
- In September, the media latched onto the Evergrande controversy and dipping crypto prices by attempting to correlate the two. Data shows otherwise, however.
- It will probably take 6-12 months (1 or 2 business cycles) before the effects of Evergrande are seen in the US real-estate markets, but it will most likely be negative for traditional assets. The question is, will this be good or bad for crypto?
What happens next is anyone's guess but underlying trends tend to show that the crypto market itself will probably be OK, if not bullish. Some notes from the vid below:
- Inflation is here to stay in the US, China’s inflation is very low right now (below 1% with up and down trends, the US is 5.4% and steadily climbing) and is more likely to recover more smoothly in the long run if they allow Evergrande to default on their loans.
- The United States was caught off guard by inflation warnings because they have outsourced most of their manufacturing overseas over the last few decades -- out of sight, out of mind. (They refused to consider increasing interest rates or lower gov spending until very recently.)
- Crypto is an “inflation friendly” asset because its price is adjustable and is not beholden to supply chain issues.
- China’s ban on Bitcoin and other assets are pretty typical of the politics there, but savvy Chinese investors often invest in foreign assets as a way to dodge taxation and political entities taking control of their assets. This includes real-estate, but also things like cryptocurrencies.
- In September, the media latched onto the Evergrande controversy and dipping crypto prices by attempting to correlate the two. Data shows otherwise, however.
- It will probably take 6-12 months (1 or 2 business cycles) before the effects of Evergrande are seen in the US real-estate markets, but it will most likely be negative for traditional assets. The question is, will this be good or bad for crypto?
