It’s a crazy crypto week, and it’s coming to a head. Today we all woke up to a completely red market, but is that a reason to panic?
In this post I would like to discuss the current regulatory uncertainties and how to deal with the current situation now.
The Current Crypto Climate: Frustration and Hesitation
Many people are extremely frustrated with the cryptocurrency market lately. There seems to be a sense of fear and greed that has significantly affected the market. Many had high hopes for a crypto rally, but instead we are facing big regulatory uncertainties. People are now throwing in the towel, so to speak, and there’s chatter about how the crypto era is over and AI could be the next big thing.
The Relevance of Dollar-Cost Averaging
This brings me to the importance of Dollar-Cost Averaging in such times. I recently posted on Twitter about three key points to keep in mind when employing Dollar-Cost Averaging in the current market. First, it’s crucial to have a long-term investment horizon, thinking in years, not months. Second, consider which coins you are getting into. Some are under regulatory pressure, and you need to decide if you’re willing to take that risk or if you would rather go for safer alternatives. Lastly, I would be cautious about using platforms that have strong exposure to the US market, especially given the current regulatory climate.
The US Crackdown and the Need for Real Utility
I see two main factors driving the pressure in the cryptocurrency market. The first is that the US sees the cryptocurrency market as highly speculative with little utility. This perception needs to change, and as an industry, we need to work on creating real utility. It’s not just about the price; it’s about actually using the coins for something meaningful. At present, we’re far from this ideal because most of the buying power is speculative. People aren’t buying Bitcoin because they need it; they are hoping the price will go up. This needs to change.
The Rise of AI and its Utilitarian Aspect
Let’s take AI as an example. Consider ChatGPT Plus, which costs $30 per month. People are not buying ChatGPT Plus with the intention of selling it at a higher price later; they are buying it to use it. This is the kind of utility we need in the crypto space.
Looking Ahead: Political Landscape and Changing Perceptions
The second factor that could change the market’s pressure is the political elections in the US in 2024. It will be interesting to see how cryptocurrencies play into the campaigns. Depending on public sentiment, crypto could be seen as an opportunity or a threat. Until there is a change in perception regarding the utility of cryptocurrencies, the US might continue to put pressure on the market, preferring to strengthen the dollar and encourage investments in other areas.
Wrapping Up: Staying Optimistic and Looking Long Term
In conclusion, while the cryptocurrency market is facing challenges, there are still opportunities for those who are focused on the long term and willing to adapt. It’s also essential to keep an eye on the rise of AI and the utility it brings. In these times, it’s important to stay informed, make wise investment choices, and remain optimistic about the future.
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Julian
CEO CakeDeFi.com
