As we have seen lately, markets everywhere are down. Some blame Russia; some blame the US presidency; some blame spiritual evils – best guesses and finger-pointing, all remarkably unhelpful in orienting oneself in seemingly hostile market conditions. But for those seeking helpful enlightenment amidst the downward market force to possibly discover a positive perspective certainly sounds more beneficial than sifting the sea of unhelpful opinion pieces that seem to be published every hour at this point. So focusing on identifying the positive in order to position the mindset to see the whole picture and act accordingly is what this article intends to do for you, the reader.
This piece will not highlight inflation, interest rates, or mortgage-backed securities, although those variables were considered. If we are too close to anything, we cannot see the “forest through the trees,” so let’s start at 100,000 feet to birds-eye this market move and better orient ourselves. Let’s get global. We are identifying the most prominent and emerging global market and newest asset class, cryptocurrency.
Why crypto? It is not to persuade anyone into a pro-crypto stance on the matter but rather to underline the world-class marketing campaigns that may or may not have escaped the masses’ immediate recognition. Crypto is being globally marketed unlike anything ever before. Just this year US$100M in advertising of Crypto.com alone has been deployed to over 20 countries, hitting the highest viewed sporting events starting with headline sponsorship of Superbowl LVI, Formula 1, UFC, Philadelphia 76ers, and 20 years of naming rights to the former Staples Center.
The reason for this single exchange spending nine figures in the highest impact areas is to obtain one billion users and become a top-20 global brand, said CEO Kris Marszalek to Reuters back in January 2022. That’s aggressive as it gets, especially for a six-year-old company. So what does this tell us at the 100,000-foot view distance? That the cryptocurrency industry leadership is not scared. They believe in this asset class, and that global mass adoption is imminent.
“But Austin, the aggregate of crypto dropped by over 50% this year alone. Two top-25 crypto companies (LUNA and Celsius) have fallen to their graves in the past month.” Yeah, so Kevin O’Leary explained on CNBC last Friday how bottoms are made regardless of the market, saying, “you always need a big player to go to zero. That always helps.” He clarifies that he is not saying he wants this to happen “…but it always gives you a good bottom when you get a large player over the lever that goes to zero. And that always tends to be the beginning of the rebuilding process.”
CoinDesk’s comparison last Thursday of LUNA being crypto’s Bear Stearns moment and Celsius likely becoming the industry’s Lehman Brothers hits hard in light of what O’Leary said – and I must agree. Call it a cleansing or whatever, but we all learn from the over-levered big player, and a washout event cleans up the space with thousands of dead or imminently dying projects on their way out forever.
So, what are we left with if our indicator of the bottom holds true? We are left with surviving crypto companies at a super attractive price. And if one considers the twenty-year high of USD strength (i.e., DXY), indicating checking and savings accounts are more stacked now than in the previous twenty years, this means the US is primed to invest that liquid into something attractive. A catalyst is still needed, but that’s a different article, with paragraph two pointing to a few good indicators to explore.