Let’s start off with the more concerning part: the upcoming and present macro economic situation. We are still very much affected by the ongoing supply chain issues. Especially everything that is coming from China because of their Zero-Covid policy. Staying in China, we also have the big wrecking ball of their Real Estate Crisis hanging about our heads. Because this sector is making around 30% of China’s GDP and China is one of the biggest trading partners of the US, a collapse will have implications for the whole global economy.
Then we are having the FED, who continues to raise interest rates despite the fact that it will bring the US economy into a recession. Yes, their reasoning right now is to bring inflation down, but this will inevitably hurt the population and the workforce in the complete country. All of these reports of a strong labor market are fairy tales in my opinion. All of the big tech companies have already started to lay off people for months now, and the increasing interest rates will not make anything better. And with the increasing interest rates the power of the Dollar is starting to increase severely. The Euro and the British Pound are on a historic low compared to the Dollar and it looks like this will continue to happen for quite some time now before reversing again.
Last but not least we have a madman in Eastern Europe who is performing an act on the European stage by hosting some referendums that nobody believes in. With these “successful” annexations of Ukraine, there is a lot of conflict potential and Russia might consider every fight back as an act of terror on their side of the playing field. With potential nuclear war danger the economy will certainly not recover anytime soon. On top of that the gas pipelines from Russia to Germany trough the Baltic sea were attacked and damaged. This now prevents Russia to certainly deliver some gas to the center of Europe.
Which brings me to the last point. The energy bills in Europe will most likely go trough the roof. With the winter approaching and less energy supply available to the rest of Europe, there will be a very hard winter for Europe’s economy as well as Europe’s inhabitants. In my opinion, we are only at the beginning of a very hard time to come.
Now that we covered the bad side of the current situation, let’s talk about some positive sides. Frist and foremost: I think that Crypto currency is becoming a more attractive hedge against the volatile fiat market. Yes, I would have never thought that but with the Euro and British Pound losing so much value to the Dollar, it is actually smart to hold some of your funds in BTC or an equivalent store of value. Of course many people will try to store their value in the dollar as it is considered as safe heaven so far but I definitely imagine many people turning to crypto as well.
Not only that but it also seems like all of the paper hands are slowly getting drained out of the markets. There might be still some potential of BTC dropping lower. This is always possible, but I would say that the worst drops are already over. What is now left is a very solid base of people who are believing in this project and are willing to go trough this crypto winter with this asset. In the end, once the next bull market will start, everyone who has hold on to his assets will most definitely profit from this situation!
Last but not least I also want to talk about crypto gaming and the metaverse. It is no big secret anymore that this branch will have a great future. Just recently, Black Rock announced a metaverse ETF and there are also a lot of projects that are connecting existing gameplay engines to Blockchains like Solana. It is important right now to keep your eyes open for developing projects and stuff that might get released soon. It might be worth it to invest some time into it, as it will most likely explode during the next bull market. I am not only talking about upcoming projects but also games like Splinterlands who already have a big fan and user base and that are constantly adding value to the project itself. I truly believe that this blockchain gaming niche will blow up very heavily during the next bull run.
While we are up for a very hard and bumpy ride over the next year, I think that all of us should keep a clear mind. Everything shall pass, whether it is a bad mood, great bull run or a recession. Everything acts in phases and whilst the next year o so will be a very heavy recession coming towards us, once we mange to go trough it, the fun times will start again. For this we will need to be prepared and this is why keeping your eyes and ears open in this situation is crucial! I am wondering on how you are planning to go trough the upcoming recession? Do you have certain niches that you are looking into, or do you hav a certain project that you are following?
Published by ga38jem on
LeoFinance
On 3rd October 2022
