Is Now A Good Time To Invest In Crypto?

The last two quarters have indeed been volatile.

In June we saw bottoms (the week to come will prove if it was local bottoms) in the major US stock indexes and also in Bitcoin. We witnessed a rally in equates and crypto from June to August and then all markets took a big hit. Mostly caused by the US Federal Reserve and other central banks. If you read between the lines of how they will fight inflation, it’s like they will simply do anything to defeat it and not care about the collateral damage it will cause.

Things have really gotten out of control in my opinion. The June low for the most indexes have been revisit and we can only hope held as a support as many of us had our hopes for.

But crypto has held relatively strong against the stock markets, which is somewhat surprising to me indeed. Crypto has been closely linked to the stock markets for a really long time, and don’t forget that Bitcoin was born in the depths of the stock market crash of 2009 and has not been tested in the current macro and geopolitical challenges that we now have. Something in me hopes that we can have a decoupling from the stock markets and Bitcoin and crypto can truly be like it was created for, a decentralized economy that cannot be controlled or inflated and not linked to the stock markets.

I think we have two outcomes of the macroeconomic disaster that we are in:

The first scenario would be that all the central banks swing and let inflation win by stopping raising interest rates and starting quantitative easing (buying bonds, treasuries, etc.). This would lead to a short-term chilling effect on the economy at large, stock and crypto will see new highs, but it will not be long-lived and we will crash really hard and turn everything into a depression.

The second scenario is to continue with this aggressive tone of raising interest rates at all costs (this will not apply to the US as I believe inflation is not a problem there anymore) in the EU zone, which will put the unemployment market well beyond the exceptions and bankruptcies in all sectors, including banks. This is going to be difficult for stocks and crypto, but I really believe that crypto will bottom out quickly and then when people realize that they can’t trust governments and central banks, they will find their way to crypto and the big mainstream adoption of this asset class will begin.

None of the above scenarios is something I’m hoping and rooting for to happen and I could be completely wrong, but it’s what I think could happen in the near future. Common to the above scenarios is that most of people’s savings are in bank accounts that are not backed by anything and are controlled by the banks.

Do you really think the banks will do anything to save you from personal bankruptcy? Rather, they see for themselves that they can save their faces and save the highly respected and credited investors. We as little people will have nothing left when all this is taken care of. And this brings me to the importance of self custody crypto, where you are in control of your financial situation.

Of course, owning crypto is a risk, but if you take the time to learn and understand how to invest and have a long-term horizon, I think it’s the biggest favor you can do for yourself. In the “Great Financial Crash” of 2008, you didn’t have this opportunity, but we all do have it now.

So is now a good idea to buy and own crypto?

In my honest opinion, it has never been a better idea. If you can handle the short-term pain, you may be rewarded with long-term gain. Always understand if those potential gains outweigh the definite risks.