Is 2008 Happening AGAIN!?
Storm clouds are gathering and there’s no shortage of doom-laden predictions out there for what might be coming at as from over the horizon. Interest rates have climbed to levels not seen in decades, banks have been going under and the debt ceiling debate has yet to be resolved.
So, are we headed for another 2008-style meltdown? Back then, the term ‘credit crunch’ found its way into the popular lexicon and there are signs it could be making a most unwelcome comeback. But, what exactly is a credit crunch and could it morph into its even nastier big brother, a credit crisis?
In today’s video, we look to answer these questions and examine when and how these threats could start to make their presence known in the markets. We’ll also consider the possibility that maybe, just maybe, this gathering storm may not be an act of God, but something more sinister.
You can watch that video here.
📈 Crypto Market Forecast 📈
It’s going to be an exciting week for crypto, and the volatility could start as soon as today. That’s because of the runoff election in Turkey. As some of you will know, current president Recep Tayyip Erdoğan has refused to raise interest rates to fight inflation. In fact, he’s been consistently pressuring the Turkish central bank to lower interest rates to fight inflation. Not surprisingly, this has only caused inflation to soar, and the value of the lira to plummet.
What’s also not surprising is that crypto adoption is extremely high in Turkey. In fact, there’s evidence to suggest that the initial pump of the previous crypto bull run was caused by Turkish retail investors. As such, it’s believed that another win for Erdoğan could create additional demand for crypto as retail investors resume their capital flight out of the lira. Conversely, a win for the opposition could result in Turkish investors selling, since interest rates will - in theory - finally start to rise.
On the other side of the world meanwhile, Hong Kong will be legalising crypto trading for retail investors on 1st June. It’s expected that there will be large inflows into cryptos popular with East Asian investors, and some have already started pumping in anticipation of these inflows. There’s just one problem - Hong Kong authorities have yet to approve any crypto trading platforms in the country. This means that retail investors may not have access to crypto right away.
There’s also an important caveat, and that’s that retail investors will only be allowed to invest in cryptos with large market caps, specifically those that are listed on at least two regular exchanges (ie cryptos with at least two ETFs). Although Hong Kong authorities haven’t specified which cryptos will qualify, there have been a few lists floating around. It’s expected that BTC, ETH, LTC, DOT, BCH, SOL, ADA, AVAX, MATIC, and LINK will all make the cut.
Another thing that was expected to happen on 1st June was either a technical debt default by the US or a raising of the debt ceiling by US politicians. Treasury Secretary Janet Yellen has been reaffirming the 1st June deadline for weeks. Lo and behold, she came out with a new deadline of 5th June late last week. As of yesterday, top US politicians came to a tentative agreement to raise the debt ceiling, but it must still be voted on in the coming days. It’s not yet clear if the vote will go through.
It’s also not entirely clear what effect raising the debt ceiling will have on the markets - raising it seems to have caused a rally, but it may also drain liquidity from the markets. There could also still be some black swans coming on the geopolitical front. For starters there’s the apparent escalation in the ongoing war in Ukraine. There’s also speculation that President Biden will sign an executive order restricting investment into certain Chinese industries, notably AI.
In case you haven’t noticed, we’re living in some truly unprecedented times, and this volatility could very well last until the end of the decade, if not longer. If you’re having a hard time understanding why, I strongly recommend checking out this video. I also strongly suggest having a hard think about how to hedge yourself against all the volatility that’s coming. If you play your cards right, these crises could become the opportunities of a lifetime.
🇺🇸 Crypto & the US Election 🇺🇸
With just over a year left until the 2024 presidential elections, politicians from both sides of the divide have been coming out to announce their candidacies.
At the time of writing, there are a total of ten noteworthy politicians who have announced their intention to run, with three of them being Democrats and seven Republicans.
President Biden and former president Trump are also among those who have announced their candidacies.
While we’d expect the election to be mostly centred around these two titans, the United States’ recent struggles with crypto regulation, CBDC adoption and the debt ceiling crisis, present a unique opportunity for some of the more pro-crypto candidates to take centre stage.
Allow me to elaborate.
Crypto is known to be a bipartisan issue in the United States.
The current administration’s approach to regulating the industry has been highly criticised as one that “stifles innovation”. Moreover, states like Florida have also been fighting against the potential introduction of a CBDC within their territories.
In a country like the United States, where almost 20% of the population owns crypto, candidates’ stances towards digital assets such as crypto and CBDCs have a notable effect on informing the choices of potential voters.
This is further evidenced by a Grayscale survey from last year, which revealed that over 38% of potential voters in the US midterm elections considered positions on crypto policy when voting.
Additionally, Bitcoin maximalists like former Coinbase CTO Balaji Srinivasan believe that a potential (but highly unlikely) black swan event like the US defaulting on its sovereign debt could see a surge in demand for alternative currencies like BTC.
He believes that such a default could lead to a scenario in which the right to hold alternative currencies like BTC could become a primary political issue.
Having said that, currently only six out of the ten noteworthy presidential candidates have a defined stance toward cryptocurrencies. They are: Joe Biden (D), Robert F. Kennedy Jr. (D), Donald Trump (R), Ron DeSantis (R), Tim Scott (R), and Vivek Ramaswamy (R).
Of these six, both Biden and Trump belong to the anti-crypto camp.
Specifically, the Biden administration recently attempted to enact a 30% tax on the cost of the electricity used by Bitcoin miners. Biden also expressed his distaste for crypto traders by likening them to “wealthy tax cheats” who exploited tax loopholes.
Trump, on the other hand, has publicly stated that he views cryptocurrencies as a “scam” whose value is “highly volatile and based on thin air”. Ironically, just last year, Trump licensed his image and likeness to be used in selling two NFT collections based on him.
In the pro-crypto camp meanwhile, we have candidates Kennedy Jr, DeSantis, Tim Scott and Vivek Ramaswamy.
As for Scott, the South Carolina lawmaker has stated that he wants to develop a digital assets regulatory framework that protects consumers, while promoting innovation.
In my opinion, of the four pro-crypto candidates, DeSantis has by far the best chance of becoming president.
Of course, if you’re interested in a much deeper breakdown of how crypto impacts the 2024 presidential elections, stay tuned for our deep dive video that comes out sometime later this week.
📊 Personal Portfolio 📊
BTC 35.46% | ETH 31.77% | USDC 17.56% | USDT 7.03% | USD 3.55% | ATOM 3.34% | DOT 1.29%
🔥 Deal of The Week 🔥
Recent events around hardware wallets have many people scrambling to find an alternative device to store their crypto.
Something that you may want to consider is an air-gapped device. These operate in a completely “cold” environment and use QR codes to sign transactions.
One of the best known hardware wallets with this design feature is the Ellipal Titan. Apart from air-gapped storage, there are a number of other features which you can read more about in our dedicated review!
👉 Get 10% OFF your Ellipal Titan Mini
🔮 Video Pipeline 🔮
- Gold vs. Bitcoin: The Ultimate Showdown!
- Bitcoin: Complete Beginner’s Guide
- Hong Kong Crypto Legalisation: What you need to know!
- Pro-Crypto Presidential Candidates: The hope for crypto!
- Stablecoin Crypto Market Impact: You won’t believe this!
🏆 What's New At CoinBureau.com This Week? 🏆
✅ Gemini Vs Kraken: Which is the Best Cryptocurrency Exchange? (2023)
✅ Tron Review 2023: Beginners Guide to TRX
✅ ELLIPAL Titan Mini Review 2023: The Same Highly Secure Crypto Wallet We Love, But Mini!
📖 Quote of the Week 📖
Assuming that “common sense” will soon return to the markets is foolhardy. This is especially the case when memecoins and greed take hold of crypto traders.
“The market can stay irrational longer than you can stay solvent” - John Maynard Keynes
Team Coin Bureau
Disclosure: Authors may own cryptoassets named in this newsletter. These are unqualified opinions, and a Coin Bureau newsletter, is meant for informational purposes only. It is not meant to serve as investment advice. Please consult with your investment, tax, or legal advisor.
Guy is one of the founding members and face of the Coin Bureau. Like many of us, he is just an average joe who became “crypto curious” back in 2013. After recognising the potential of blockchain technology, Guy set off on a mission to create crypto educational content, working with others to start the Coin Bureau website and released our first video on YouTube in 2019. You can learn more about him in his Who is Guy? blogpost.