How many times have I heard these words in the last 14 days, I don’t even know. I am afraid that the whole sentiment and narrative in this market is being (in an exceptional and intelligent way) doctored, about whether it is the end, about whether it is a weak market and without confidence from the big investors, about its lack of support, etc… Unfortunately let me tell you first of all that “We are not in a Bear Market, we are in a War Market” which is not the same, and in this case everything changes.
As we usually have a selective memory and we like to divert the focus of attention to what interests us, let me remind you of just 2 things, which I hope will awaken you to a reality that is illustrated and documented:
1. Exactly 2 years ago I heard the same comments about bitcoin and cryptocurrencies with COVID-19 blocking the entire world and changing our way of life, going from the most absolute freedom to the strictest lockdown and confinement that I have ever remembered. In those moments of great uncertainty, he returned to the easy-to-sell speech that was the end, and although I don’t need to tell what happened next, I will remind you. From a pessimistic and hopeless scenario with a BTC trading at $3,800, we went in 12 months to an exciting and euphoric scenario that led us to see bitcoin trading above $68,000, the result of a reality that COVID-19 itself revealed to us, ” We couldn’t go out and live on the physical plane, but we could have a second vital experience on the digital plane”. Curious that the problem was at the same time the solution, be careful that the same thing does not happen now.
2. Although it may not seem like it, the Chinese real estate crisis is still very, very latent, that issue has not been solved yet, but expect bigger things to come since the USD bonds of the 5 big real estate developers in China, with combined liabilities 3 times larger than Evergrande are in full free fall. The true extent of the impact that this can have is unknown.
For these things and many more that I could list, I believe that the biggest problem facing the world, the regulators, the legislators and the black-tie commissions of great world leaders addicted to power is the management of the imminent fall of fiat money. There is no threat, no one should be protected if bitcoin drops $10,000 or goes from $60,000 to $20,000. Luckily Bitcoin does not destabilize anyone’s economy, nor does it have to report to shareholders’ meetings, nor it is an asset that should emit capital gains. It is clean of all that, the world economy is addicted to fiat money, not bitcoin.
The real problem that they do not want to communicate and much less the one they want to face is not the scenario that they sell us to prepare for an “Economic slowdown”, the reality is that we are facing and heading towards a “financial crisis” which is not the same (remember Bear Market – War Market). The banking disaster is served, now it is only a matter of time. Even the #Reuters agency is actively and passively reporting that Chinese defaults have doubled in February, fuelling the voracious destructive appetite of the real estate crisis in which they are immersed.
But it is easier to talk about war conflicts, whether or not the European Parliament approves the PoW, the shortage of supplies, etc…
For our part, the analysts and portfolio managers at Belobaba follow current events very closely, not letting them mix with reality so as not to lose our point of balance. We see with hope and a great catalyst that as little as 2% of US volume is in crypto derivatives (single digit, absolutely wonderful) in a market that manages $3.000 billion dollars, no doubt both markets (derivatives and spot) should seek stability naturally, and that translates into an irremediable transfer of capital from one to the other.
We also obtained very interesting data on the evolution and maturity of this market, obtaining the certainty that the institutional and strong hands, as well as the states are beginning to take positions in it. During 2021 in a very initial stage of this market, 1,500 billion dollars entered, something that is not worth mentioning on a news or to be analysed, but that undoubtedly positions us as the emerging market with the most trend and interest of all time. Our methodology now focuses on percentages of how many of those $1,500B certain projects have been able to attract, in order to determine in the next upward wave, first the ATHs that are going to mark the different assets that we have under management, and second to determine which will be the new assets that we incorporate into the portfolio based on their potential to raise capital.
NOTE 1: to determine this very well, not to make bad decisions that could harm your portfolio and not to be fooled, the market dominance of an asset is the ability it has to capture investors’ money. If you start from that base, your assessments will be quite accurate.
NOTE 2: don’t try to find a logic of fit from the corporate environment to Cryptocurrencies, Tokens or Nft’s since their use cases are often 0. Try to understand how networks burn and pulsate, how different tribes contact and connect or why feeling identified with an intangible object is so important. You must understand the heart of blockchain to be very close to its meaning, that is the way to its value.
With inflation at a 40-year high, an extremely tough geopolitical climate rising interest rates and knowing that bitcoin is still (for us) not considered as a safe haven asset (falls due to external causes are more severe than for example the indices or gold), we are clear that in times like this is when the greatest opportunities for long-term wealth are given, but we owe month to month to our customers, to our own philosophy and our own working procedure, so it is not time to seek profitability but to produce it.
In order to achieve this, since January we have had to put our portfolio in active protection, moving away from overexposure in assets that were giving us good numbers, on the one hand, to start protecting ourselves with assets that represent the value of gold in the form of tokens, and on the other (this is the active part of portfolio protection) to intensify our activity in decentralized finance (DEFI) in networks such as Ethereum or Terra to deposit stablecoin profits in lending protocols until determining the strategy when the market confirms a trend reversal and on the other hand to work different strategies (long or short) in liquidity pools, appeasing our profitability by optimized farming in various financial products, which allow us to balance risks of impermanent loss.
This is achieved by being clear about what you do not want and what you are looking for with the assets you put in a liquidity pool, in our case we are looking for 2 operations:
1. A controlled DCA of the main “Blue Chips” of the market, without renouncing to make a profit while the market continues to fall.
2. Work liquidity ranges in Uniswap V3 in those pools that right now are moving more volume in transactions than what is locked inside (the perfect mix of the best cost/opportunity that I know), so if you sharpen your work range, the result is very powerful.
I do not want to end this article without thanking our collaborator and strategic partner https://bitbcn.org/ (Blockchain Institute & Technology) for their not easy mission to educate and train hundreds of people every year in this delicate but necessary area. As an investment fund we are the first to recognize the lack of talent and professionals in this sector, more and more people are needed with very particular skills in modern and flexible portfolio management, able to perform very precise tasks and full of responsibility in the management of digital assets. Thank you to all above for removing the blindfold from the eyes of so many people.