READY For The New Week | Compare 2018 And 2022, Is It The Same?

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2022-09-14 21:20:44

Market situation

Last weekend, the market did not have much information. US stocks ended Friday’s trading session with a slight increase. Oil contract price also increased to 107 USD/barrel. And gold still holds around 1828 USD/ounce.

Bitcoin price remains flat around $21,000. Altcoins rise slightly as BTC rises.

This week, the market waits for more information on the situation of US waiting to be sold. House prices in some areas have dropped, but overall prices are still high. The CPE Consumer Inflation Index will also be released next Thursday. According to estimates, this month’s CPE is at 0.4% and higher than last month. The unemployment situation will also be updated this week through the number of people declaring unemployment. The number of people who declared unemployment last month was 229,000, and the estimate for this month is 227,000.

To date, many people think that the bull season for BTC and crypto is over at the end of 2021. When compared to the 2017 bull season, the price change has many differences but the market sentiment remains unchanged. change. From the top, BTC price in 2018 gradually decreased and after each drop there was a slight pullback. Investor psychology also goes through stages such as excitement, arrogance, fear, denial, depression, … when the price drops from the peak.

What sets the market apart now from 2017 is the high correlation between US stocks and the BTC price. At the same time, the great influence from the macro-economy such as epidemics, inflation, war also has a great impact on the crypto market and other assets.

El Salvador is in trouble

The market fell and there were reports that El Salvador was in financial trouble because of their BTC storage. President Bukele of El Salvador stated that, by accepting BTC as legal currency, the parliament and the people are also prepared for large fluctuations in the price of BTC. In addition, they look at the long-term future development of BTC as well as the crypto market, not just looking at the short-term to evaluate the market.

Currently, El Salvador has more than $1 billion in international debts to pay off next year. Meanwhile, El Salvador’s economic growth has plummeted. Crucially, the fact that the BTC price fell more than 70% from the peak caused the national investment in BTC storage amounting to about 100 million USD to have been halved. These raised concerns that they would not be able to repay these loans.

According to estimates, the entire cost such as infrastructure for El Salvador to accept BTC is only 374 million USD. In particular, the amount of money the El Salvador government is losing nominally in Bitcoin is only about 50 million USD, this figure is less than 0.5% of the national budget. These numbers are all very low compared to $7.7 billion in bond debt or the total national economy of $29 billion. So to say that El Salvador is in economic trouble by accepting and investing BTC is not reasonable.

What the El Salvador government is worried about right now is the amount of debt coming due to be paid, not the price of BTC falling. Creditors who are large agencies like the IMF can use the reason that El Salvador’s economy is unstable because they accept it. BTC to not continue lending. Rating agencies, including Fitch, downgraded El Salvador’s credit score on the grounds that the country’s financial future is uncertain.

Other information:

  • According to two people familiar with the matter, Goldman Sachs is looking to raise $2 billion from investors to buy back struggling assets from a troubled crypto lender. Residents said the proposed deal would allow investors to buy Celsius assets at a large discount in the event of a bankruptcy filing.

  • Voyager is in financial difficulty because it has lent a large amount of money to Three Arrows Capital (3AC), but the company is in danger of bankruptcy. Therefore, Voyager had to borrow credit from Alameda Ventures to solve the current difficulty. A Twitter account citing the contract indicated that Alameda only continued to provide loans to Voyager when the company had no debtors went bankrupt. Therefore, if 3AC goes bankrupt, Voyager’s loan source will also be cut off at any time.

  • Axie Infinity announced that it will refund users on June 28 after losing $620 million in a previous hack.

  • Gary Gensler, Chairman of the SEC spoke to the FT about plans to work with the CFTC to ensure both agencies carry out regulatory oversight to protect investors.

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