Our Markets Are Bubbles

Here is your negative perspective for the day.

Call me a doomsayer, but we are currently in the one of the biggest bubbles ever witnessed.

Not understanding why. Neither did I, let me explain how…

All bubbles begin with a nugget of truth. Crypto’s many developments planted the seeds for a historic bull market since 2020, catalyzed by an easy monetary environment. However, many things in crypto are *enabled by* a bull market. Here are some of them.

The first thing: DeFi yields. DeFi summer 2020 was a bacchanalia of literal money-printing. Majority of DeFi use cases surround leverage — the demand for which grew because of a bull market. As with all parties, there came a time to foot the bill.

It didn’t take a bear market to reveal there just weren’t enough buyers to support inflationary shitcoins minted out of thin air to finance high yields. Imho the future of DeFi will require yields that do not require self-referential ponzinomics — but real world demand.

Without the impetus of a bull market, P2E games will become less profitable than they are today. If the financial proposition of P2E games begin to dim, it must make up for it by having fun-parity with popular Web 2 games, especially if they are to command unicorn valuations.

They will be lower than what DeFi apes want, but they will be more sustainable and higher than what you can get from your bank, i.e. 5%-20%.

The next to go might be unsustainable P2E economies. The bull market lifted demand for NFTs and in-game tokens alike. This created profitable opportunities for players and spawned an entire new economy — that of guilds and scholars.

Crypto is, above all, a rolling ball of money. Rolling from meta to meta, driven by the desire of everyone to be “early”. Why invest in Sushiswap if you can invest in “Bananaswap” on a chain no-one has heard of, but where you are the top 20 holder? This results in spreading the liquidity too thin. There is simply not enough buying pressure to sustain as new projects are popping up daily. All these new projects require buying pressure, be it alts or NFT’s.

There’s not enough liquidity in the market to sustain all.

Remember 2018, where every single ICO printed money? Let’s have a look at the pet peeve of CT, NFT’s. No-one who is not unreasonably wealthy prefers a digital PFP over $200. At least, if you’re living in the real world.

Every day more “professional” NFT influencers are popping up. Hard to tell the difference between NFT twitter and Onlyfans currently. I’ve seen many tweets of people “doing NFT’s fulltime”. “Dot-com wiki: “An unprecedented amount of personal investing occurred during the boom and stories of people quitting their jobs to trade on the financial market were common.”

Alts without any added value, lazy forks and NFT’s are popping up everywhere. And most of us don’t even realize they don’t add any value, but only cause dilution. At the height of the boom, it was possible for a promising dot-com company to become a public company via an IPO and raise a substantial amount of money even if it had never made a profit — or, in some cases, realized any material revenue.

We don’t realize how crazy things are getting. Most people in crypto are throwing thousands of dollars at stuff while high on fictional wealth, not realizing the bubbliness of bubbles we are in. 100% of the investors in a coin are judging their port at the ATH.

Whereas only one person is able to sell the ATH. Your portfolio is not worth token price x number of tokens, but the number you have in stables. It’d be safer to depreciate your crypto value with at least 50%.

There is certainly added value for crypto, but if you look at real life appliances of crypto they are pretty scarce. Remember the popular saying: “crypto is a solution looking for a problem?”

Every project in crypto utilizes tokens. In most of the cases a token is not required to provide the service, but it’s integrated in the protocol to raise money for the people developing it. This is hindering development and again, resulting in dilution of liquidity.

Most protocols would run better if the system would just run on tokens like ETH/SOL instead of “Bananaswap” tokens. Imagine going to your local Walmart and not being able to shop with dollars, but having to use “Walmartcoin” which you can stake for discounts.

I’ve heard that the gaming NFT’s are the future. If you think rationally, do you really think there are a lot of gamers buying a NFT skin for more $20? People in the real world are complaining about triple A games costing $50 for a complete game.

“Pay to earn” is just the biggest ponzi I’ve heard of. Someone is paying the gamers, and it surely ain’t the devs. The money has to come from somewhere, and it’s the “late money” flowing in.

So now we have the Crypto Superbowl ads. Let me quote wiki again: “On January 30, 2000, 12 ads of the 61 ads for Super Bowl XXXIV were purchased by dot-coms.”. Everyone has heard of crypto, but retail interest is at a low.

FED is expected to hike rates. Dot-com wiki: “In 2000, Alan Greenspan, then Chair of the Federal Reserve, raised interest rates several times; these actions were believed by many to have caused the bursting of the dot-com bubble.””

Even though I’m also a greedy mf’er and want this to go on forever, let’s be real. Me personally think the collapse of crypto will be the best thing that can happen.

Shake out the TikTok and Youtube influencers, the cheap forks and useless alts. Make CT a ghost town for a real extended bear and reset BTC to $18k and ETH to $800.

BTC (and ETH) dominance will go up, which will concentrate liquidity again where it matters. BTC will have be reborn like a phoenix, but has to slow down first. Just try and comprehend how much money has been printed.

I think the more pertinent question for aspiring founders and investors now is what *won’t* change in crypto in 12–24 months What kinds of projects or businesses are not wholly dependent on a constant state of up only?

To my reader on Medium, I hope you found this article useful and dubiously hope-filled, in this sad predicament we currently live through.

I hope I was able to provide a greater guide to “Our Markets Are Bubbles”.

The aim is to familiarise yourself with more DeFi and Financial Freedom content.

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