Crypto Tanking | What You MUST Know.

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sponsoring today's video we'll even be

talking about crypto punks with otis hey

everyone me kevin here in this video

we're going to talk about various

different updates are regarding

cryptocurrencies we're going to talk

about price action that we're seeing

we're going to talk about some updates

regarding what happened in singapore

we'll talk about and crypto as an

inflation hedge we'll also talk about

myanmar a bloomberg's price target for

crypto what happened with solana uh but

more importantly the broader market

what's happening with the broader market

these are all things we're going to

cover in this video so if you're curious

about what the heck is going on in the

crypto world here's the update for you

uh for december 13th quick no because so

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before christmas okay folks let's get

right into this we'll go ahead and first

just get a quick little preview of the

day look at this folks bitcoin just

dropped below 47 000. ethereum is now

below 3800

and so far we have seen nothing but this

slip trend continue if we drop on over

or jump on over rather to

uh our weeble here we can see generally

we keep revisiting this a 47

100 ish line

for btc i do have a double set of

supports here a drawn a softer one and a

stronger one the stronger one is that 47

one level and 46 8

is the softer one this is really where

we see sort of that pain extending and

right now we're bouncing off of this

again at 47.1 here bouncing around again

you can see the price over here so these

very very very important lines here this

is on the one hour chart if we go out to

the one day

you could see the pain that we've kind

of been playing with right here so it's

a little less evident on the one day

chart but on the one hour chart you

could definitely see that these have

been holding when we get larger

liquidations that's when we get these

pull throughs uh but even if we go back

a little bit

we see some of these same levels come

into play like at the beginning of

october and of course if we jump in over

here towards where we've been playing uh

since about the beginning of december we

could see these lines pretty pretty

consistent uh similarly with ethereum

except ethereum breaking past its 4k

level and when we break past the

ethereum 4k level we do have a support

line at 37.64

and that's essentially what we're

stretching down to right now and we just

bounced off of that sitting at about 38

so watch that in terms of levels now in

terms of cardano worth noting that we've

so far and it's unfortunate we've been

pretty much perfectly following the

fibonacci right down and it wouldn't

surprise me at all to see cardano get

back to about a buck o2 this is where in

the summer i did a substantial amount of

buying on cardano and it ended up being

a phenomenal investment because the

thing almost tripled actually it did

triple i didn't sell for a triple i sold

for a double but i'll take it

but anyway this is one to watch sheba

did a lot of a similar move here with

the fibonacci so watch for that uh

similar retracement that we're seeing

here now let's go ahead and talk about

some of the news this is a little bit of

the price action that's been going on

let's talk about some of the news and

try to make sense of some of the madness

that's going on so in order to do this i

think it's easier for us to just hop on

over to

our uh our outline over here it's just

easiest to flow and a lot of you seem to

appreciate the outline so first it's

worth noting that 90 of bitcoin has been

mined as of today so congratulations

that doesn't mean the next 10 is going

to be the hardest coin that has ever

been mined but it is a big milestone for

bitcoin uh also binance uh binance had

an application to run an exchange in

singapore they bloomberg just reported

that they have withdrawn their

application to operate an exchange in

singapore they'll wind down and close

operations for this particular branch by

february 13th of 2022 uh this was

originally singapore was speculated to

become the global headquarters for

binance so it came as a little bit of a

surprise some folks are indicating that

maybe this is why we're seeing crypto

sell down a little bit now binance later

came out and said hey look they have an

eighteen 18

a percent stake in the hg exchange which

operates in that region uh and that kind

of made their application quote somewhat

redundant

and they ended the message on twitter

with onwards which in my opinion when

you kind of end a message with onwards

it's kind of like you're kind of rolling

your eyes like ah well it wasn't meant

to be i guess and you're kind of moving

on which kind of implies they wanted the

permit but still withdrew the permit for

some reason and and this kind of

reiterates not only the regulatory

difficulties that we face but the

regulatory uncertainties that we face

it's kind of like what we heard in the

congressional hearings about hey should

we have a single regulator should we

have multi-regulators

versus having nothing you know should we

just use the regulatory regimes that we

have now or stick with nothing and

really the worst is having nothing and

that's kind of what we have now is very

little crypto regulation and that makes

it very difficult to jump through hoops

because you don't know what the hoops

are supposed to be when you're trying to

apply for things like for example a

bitcoin etf not talking about a bitcoin

futures etf an actual bitcoin etf like

if we just got hey if you follow these

rules you can provide lending services

coinbase hey if you follow these rules

you can have a stable coin if you follow

these rules you can you have an etf

great then then at least it gives us a

path but we don't even have that path

right now and so that's where congress

is lost uh in in trying to regulate

crypto and honestly i don't think they

even remotely understand it but then

again i think the vast majority of folks

who get into crypto realize that the

more you get into crypto the more you

realize you don't know a lot about

crypto because there's such a vast

amount of knowledge it's like when you

first get into crypto you think you know

everything and you're just saying

unconscious incompetent like you don't

even know that you're incompetent in

crypto then you get to like the

conscious incompetence where it's like

oh man there's a lot to learn like i

consider myself there like i'm aware

that there is so much more learning to

do but that excites me because it gives

me so much to read and research every

day i love it uh and and this was one of

them okay now you might think this

person was a little fudd-ish but they

had a little uh they had a very unique

perspective about when you want to

invest in crypto as a hedge and when you

don't want to use crypto as a hedge and

i thought this was very very unique so

it's worth talking about now for a quick

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this uh well actually you know what i'm

just going to jump to the bottom line on

this you can kind of pause the screen

here and read a little bit of the back

story but a lot of this was the back

story here i think what's most important

is let's just look at the summary here

so the summary of this person's opinion

piece it was an opinion piece in

bloomberg this was written by aaron

brown he's the head of research at aqr

capital and this was his summary his

summary was first

you should buy crypto if you think the

dollar is going down or into the toilet

and he believes that a drunken congress

can lead the dollar to collapse and you

can pull up the value of the dollar by

looking at for relative value of the

dollar by looking at the dxy chart i'll

pull that up in a moment but i want to

explain drunken congress so

their argument of what a drunken

congress is is this is that democrats

like to raise taxes and spend

republicans like to cut taxes but they

don't cut spending as much and he

believes that right now we're in the

state where you kind of have nothing

like democrats can't do anything

republicans can't do anything but

republicans have a good chance of

winning power in 2022 at least in one of

the houses of congress which would mean

we would need some kind of bipartisan

action to actually get anything done in

congress and when you have republicans

and democrats working together you tend

to get

more spending

less tax

or less less spending cuts so again more

spending which is inflationary less

spending cuts which is inflationary

potentially tax cuts which is

inflationary uh and and usually you

don't get as many race taxes when you

get this coalition here so he's

basically saying you have a lot of

inflationary pressures uh when you have

this drunken congress that is when you

get bipartisanship between republicans

and democrats it's actually good for

crypto which if you look back

at the last year and a half a lot of the

bipartisanship between democrats and

republicans led to the three stimulus

packages and virtually on every single

stimulus package we hit new highs when

we got this crazy amount of spending of

our government right and it also

weakened the dollar

which again you can look at the strength

of the dollar because crypto globally is

really denominated in relative terms to

the dollar

and if you look at the dollar chart here

you can see that every time we took

stimulative stimulative action the

dollar weakened right so over here in

april we passed our first massive

stimulus package boom

the dollar weakens we pass our next

stimulus package in december the dollar

hits an all-time low we pass our next

stimulus package in uh in in january the

dollar remains at an all-time low and it

kind of vacillates then later but every

time we stimulate it and government had

their sort of bipartisan efforts

we saw the dollar fall to new level low

levels uh in in that consistently is at

least deemed to be something that leads

people to fly into crypto because they

see a weakening dollar as a hedge uh or

they see crypto as a hedge to a

weakening dollar so if you think the

dollar is going to keep failing or the

or maybe not necessarily continue to

fail because it's actually been

strengthening lately but if you think

that the dollar is going to weaken in

the long term buy crypto

if you think we're going to get more

monetary stimulus

because the economy is weakening so this

is like your economy is slowing down he

actually argues you should buy real

estate and not crypto so if the economy

is shrinking and slowing down he says

the last thing that you want to be

exposed to is a startup and he compared

crypto to kind of like being a venture

capital investor without needing to be

an incred accredited investor so like

you want to invest in the next startup

hey look that's great when the economy

is booming but startups suck when gdp is

declining and the economy is shrinking

and crypto acts a lot like a risky

startup so if you if you think that gdp

is going to decline and our economy is

going to slow down probably stay away

from crypto was his argument if you

think the dollar is going to lose power

that's where you want to get into crypto

if we have a war he says buy crypto so

he's got a lot of reasons for buying

crypto so war by crypto dollar loses

power by crypto financial conflict buy

crypto

supply so this would be like banks

having over leveraging issues or

collapse risks right 2008 style risk

which is really what created crypto

anyway

supply chain issues so for supply chain

issues interestingly he thought that if

you are investing in crypto as a way to

hedge against inflation risk but you

think the only reason that we're having

inflation is because of shorter term

supply chain issues then maybe you don't

want to be in crypto and the reason for

that uh is is again going back to that

venture capital style speculativeness is

that hey if that temporary inflation i

know that's like a hot tamale to talk

about right now but if that supply chain

inflation goes away then then you might

lose some of the benefits of of using

crypto as an inflation hedge as

inflation potentially goes down now in

theory uh that would mean the worst case

scenario would be supply chain issues

going down

the

and then all of a sudden so we we get

inflation going down so inflation goes

down but on top of inflation going down

you also potentially have gdp going down

maybe as you turn into this sort of

deflationary spiral this in theory would

then be the worst case scenario for

crypto like best case scenario for

crypto would actually be inflation going

up in gdp going up right startups are

good when gdp goes up inflation uh goes

up which is good for for crypto right

worth noting uh it's also worth noting

that i just ran a poll and just as many

of you seem to invest in a crypto as a

way to protect your dollar's value as a

hedge against inflation which it's worth

noting those are different things right

the dollar's value is relative to other

currencies the uh amount of inflation we

have is how much prices are actually

going up and and take a look at this i

ran this poll on twitter what's the

number one reason you invest in crypto

first of all 51 of you just invest in

crypto because prices trend up

which

is probably not the best reason to

invest in something

in fairness trends can change okay like

trends do not have to continue but but

in hey you know what then again a lot of

people invest in the s p 500 because

stunks go up

but then again if you take out the top

10 uh companies in the s p 500 the s p

500 is lower than where it was before

the pandemic kind of crazy uh and then

of course you guys are match guys and

gals are matched between investing in

crypto as an inflation hedge and a hedge

against the end of fiat which would be

you know dollar collapse right

so it kind of really ties into what

we're seeing here

and then uh if the economy is stagnant

uh then then again you also don't well

we already talked about that you don't

necessarily want to invest in crypto so

that was kind of interesting now i do

want to mention i saw i put a little

kevin note in here we had the highest

inflation reading like in the last 39

years on friday and crypto fell why

because crypto tends to consistently

fall on cpi days now you'd think when we

have these high inflation reports crypto

would go up but that's not when crypto

goes up so there's not really a a great

link between cpi going up

and like bitcoin or the other cryptos

going up if anything it's the opposite

it's when we get these high reports i

almost wonder if

folks are

trading crypto as as a potential uh risk

asset and that they're trying to escape

to some degree when we get these high

cpi reads because we think that uh oh

well if rates go up

then maybe that means cheap money is

going to go away

and and potentially crypto goes down so

that's another thing that's worth noting

is every time we get these cpi reports

ironically they come in high and crypto

tends to fall that could be because the

beta

between i can't draw beta very well but

anyway the beta

between

the the nasdaq

and uh crypto is actually increasing

and what that means is that if if you

have a beta of one and the nasdaq goes

down one percent then you would expect

crypto go down to go down one percent uh

that we're getting closer to one between

the nasdaq and crypto so crypto's

trading more like a tech stock

than it ever has before and that

relationship has doubled over the last

few months which is also quite

interesting

uh so anyway then some other information

that's worth noting is that in myanmar

the national unity government

which has been recognized by

france and this government has offices

not officers i guess they also have

officers but anyway offices in the u.s

uk france the czech republic australia

and south korea

they have come to recognize

tether as uh their currency of choice

and they are doing so to prevent

government seizure of their money and

increase privacy it is common to peg to

the us dollar as well if you have an

uncertain or like unstable currency

and this all comes

it's also worth noting that they're not

technically the government in power

right now this comes after the current

regime took power via coup d'etat back

in early 2020 now a military junta runs

myanmar and so this national unity

government is kind of like a shadow

government that's trying to operate

outside of the military junta and

they're using tether to try to create a

government uh the official central bank

of myanmar has actually banned crypto

but again this shadow government is like

f the government f the central bank f

the military we're creating our own

government and we're using tether

which kind of surprising like a little

surprise they wouldn't use usdc which is

a little bit potentially more

backed

right latest research suggests that a

tether might only be somewhere between

20 to 30

actually backed by like treasury bonds

or cash and the rest are it can

frequently be just any kind of

speculative corporate asset which could

be uh you know in theory it could be

junk corporate bonds you know leveraged

loans whatever

now another thing that's worth noting in

in just sort of the pain regime right

now is you do have a lot of

institutional investors investing in

crypto and when you have a lot of

institutional investors investing in

crypto especially bitcoin and ethereum

which ethereum lately has become a lot

more popular for institutions uh but

either way both of them are very very

popular you do have bloomberg

frequently reporting that uh bitcoin

seems to be heading to about forty

thousand now that could be straight up

fud or they could be right but

no matter the more they say it the more

you have institutions reading this and i

just want to let you know what the

institutions are reading they're reading

bloomberg saying we're going to 40.

uh whether or not that will happen i i

don't know but it's just worth noting

that i also think that a lot of this

comes off of the backs of the federal

reserve fears

because look

again we we know the fed is going to be

accelerating their taper this week or at

least we expect that which could lead to

rates going up sooner and again when you

have rates going up sooner you kind of

have this like disaster that happens so

let's let's draw that out really quick

so rates uh go up what happens when

rates go up well your gdp might fall

right gdp might fall and so the goal of

obviously increasing rates is to try to

get inflation to go down but in doing so

you crimp business

borrowing potentially which could reduce

and even consumer borrowing which could

reduce gdp and remember what this author

mentions he says look if gdp goes down

and then you potentially over uh

overtighten and you go into a

deflationary environment well now you're

in your worst case scenario inflation

goes down and gdp goes down

right that would be bad that's bad for

crypto so it's possible the market's

trying to incorporate like

dang it if inflation doesn't fleck down

that's why we go down with cpi releases

if inflation does go down and at the

same time we over tighten then we could

have a slowed down economy and that's

doubly bad for crypto that could be a

little bit of what we're seeing right

now

some other news and this is on solana

specifically which i'm just going to

grab solana here really quick on

uh

what do we got here weeble solana has

broken hardcore my 186 support level

that i had drawn for it

now i don't have many other levels drawn

for solana and we could probably

try to do those together but i don't

know how worth it is right now a lot of

the pain though aside from doing some

more ta here on uh on solana a lot of

the pain here on solana right now is

coming because and we're down nine

percent it's coming not only because of

the same reason i mean look at

ethereum's down eight percent so it's

not like it's down substantially more

right but a lot of this is coming

because of uh the problems that we had

on thursday and that is another

another another

ddos attack on the solana network which

is not very ideal so on thursday we had

a ddos attack that slowed the network

and this

this has led to a lot more github

submissions for solana which some folks

are saying hey there are there are more

github submissions or you know change

submissions for solana because you're

having problems others are saying it's

because solana is just beating out

cardano and uh polka dot which if only i

could spell right when i type here on on

the ipad but whatever uh and so you've

got a lot more solana submissions which

some people are seeing that as a bullish

sign others are saying well it's because

there are more problems and the latest

problem really had to do with another

ddos attack that slowed the network it's

worth noting the following uh in october

i did a video on solana and in october

you needed 18 entities on the solana

network to get you to a 33 network

consensus this is a very important

threshold this is compared to ethereum

where you have about seven or eight

validators that you need to get to about

33 consensus which implies that solana

is more decentralized than ethereum uh

or uh the uh the 10 on polygon where all

of a sudden you get to 63 control when

you have the top 10 which is crazy like

that's not very decentralized right this

is sort of your classic solana argument

to say look salon is more decentralized

but the problem is every time we have

these ddos attacks just like kind of we

had in september when we had an attack

that that led the entire network to shut

down for 17 hours and then all of a

sudden enough validators got together to

decide together to restart the network

it leads a lot of people to wonder in

question wait a minute how decentralized

is solana actually because even though

we might have 18 entities

that get us to 33 consensus which

implies it's decentralized what if

you actually have a lot of these

entities that are controlled and owned

by the same groups of people then then

you actually have less decentralization

than it appears right

uh it's also important to remember that

solana is a level one protocol it's not

like built on top of ethereum uh and

anytime you have a level one solution

you potentially uh and you're creating a

new one you potentially create stability

concerns because you're really creating

a new blockchain tech

and remember that solana uses proof of

history proof of history i wrote it over

here just so you can have a recollection

of it it's a system that encodes time

stamps into transactions before they're

sent to the blockchain allowing the

blockchain to calculate thousands of

transactions at the same time without

worrying about trying to figure out what

the order of the transactions is because

each transaction already has a timestamp

and they're basically by default ordered

and this allows solana to work more

quickly in theory more efficiently and

cheaper but again this uh this this

attack is not so good and has led

grayscale investment to write the

following the solana consensus mechanism

uses a new blockchain tech that is not

yet widely used and may not function as

intended there may be flaws in

cryptography underlying the network

including flaws that affect the

functionality of the solana network or

that make it more vulnerable to attack

and unfortunately that's a little bit of

what we're seeing right now so uh you

know

i think this is just growing pains uh

for solana i'm personally not heavily

worried about it although the only

investment i have right now uh is

twofold one uh axi teams about 40k and

axi teams probably worth a little less

right now uh and another in ethereum uh

i'm really watching right now the dip

very very closely so that way uh

once i feel like we've bottomed i want

to have a very diversified portfolio and

i kind of want to have like a nice pie

where i've got a little bit of you know

dot a little bit of a tara luna a little

bit of salon whatever right and so i'm

working on those allocations of course

anytime i buy or sell i send alerts to

everyone in the stocks and psychology of

money group uh whether it's crypto or

stocks probably won't be crypto forever

in the stocks of psychology money group

but i imagine for at least the next

three months or so uh but stocks at

least uh for the time being uh no no

plans to stop those alerts but anyway

you can you can check out all of my

programs that i have on building your

wealth link down below using the new

xmas coupon code that we have for

christmas coming up

but uh yeah there you go this is sort of

an overarching update in terms of crypto

for me uh what i would say in terms of

btc pricing

is is we really want to watch this level

here because look we have been watching

consistently this laddering down to new

lows here i remember when we were

dancing between 56 and 58 and now we're

dancing at this support i'm nervous that

if bloomberg's right we're going to be

soon dancing around

the 37 to 36 range i hope not

because i do think that this is going to

drive more liquidations you're going to

have substantially more people upside

down on their crypto purchases which is

not good because then it leads to more

paper handing like everybody's a diamond

hander when you're still up right like

people like oh the market's down but

don't worry i'm still up or or it's like

kind of like the classic thing that

people always say it's like oh

uh somebody says crypto's crashing and

then they're like what are you talking

about cryptos crashing 5 down on btc

just a normal monday but if that becomes

a problem when like every single day is

just a normal monday and it's a normal

tuesday it's a normal wednesday as you

keep going down five five five five five

right now again the broader market is

selling off as well so this is no skin

off of just crypto i mean look tesla's

down 5.6 freaking percent right now you

know sofi literally just broke support

it's down at 14 freaking dollars and

they broke us they broke a major support

line so you got some serious pain

happening in the market right now real

sort of risk off happening right now

but uh anyway these are some of my

thoughts about crypto thank you so much

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