Jul 12, 2022
Hold your coin wait patiently for the return of liquidity.
Translated by Ding HAN and Yalan WANG
[Figure 1] doesn’t show a $2.3 trillion reverse repurchase at weekly rate of $200 billion since the current speed of pumping is $47.5 billion a month. In contrast, these $2.3 trillion has nowhere to invest, but to earn interests from overnight reverse repurchase undertaken by the Fed.
This reflects the super abundance of funds in the market from another perspective. According to the Fed reverse repurchase rate, $4.75 a month in the first three months and $90 billion a month in the following months, it will take 27 months to digest these $2.3 trillion.
This is similar to the cryptocurrency market, where a significant amount of USDT sleeping in the accounts as well. The total market capitalization of stable coins is $143.2 billion, a contraction of 14% compared to its ATH, $166.4 billion on March 19, 2022[Figure 2], while the price of BTC and ETH has fallen by 70–80%.
Therefore, the dominance of stable coins market cap ($143.2 billion) over the total market capitalization of BTC and ETH ($380 billion+ $136.6 billion) now equals to 27.8%, this is extremely high — the highest dominance rate in history [Figure 3].
The highly liquid cryptocurrency market, like US stocks, is not short of money but lacks confidence. Once some certain events reverse, such as the end of the Russia-Ukraine war, inflation decreases after the peak, or the Fed pauses its interest hiking policy due to economy recession, etc., it may lead to a V formation even a bull run. This is what I have predicted — there are only short-term bears, no deep bears.
The judgement of “Only short-term bears, no deep bears” mainly makes sense for crypto standard holders. Since the bear market doesn’t last long, there’s no need to take the risk of selling at a lower price and losing tokens to do cycle speculation.
Crypto standard holders believe:
No matter how much money have been lost, it can be double earned as long as I hold.
But if tokens have been distributed (sold at a low price), it can’t be back any more.
Calculated by crypto standard , 99.9% investors are at their peak when they first invest in crypto.
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