It’s always exciting on the blockchain, and this week — all eyes are set on the Chinese Banking system and the complete seizure of the citizens banking accounts.
There’s 2 JUICY crypto picks inside so READ THIS.
What’s happening right now in China just further solidifies the need for decentralized currencies, crypto, and why it’s always best to store your digital asset on cold storage.
Let’s break it all down!
It seems like China is getting their own 2008 housing style collapse. Expect a lot more totalitarian and grim…
A large number of local banks in China have frozen withdrawals from their customers as more and more people have tried to withdraw their own capital from local banks. Which we’re using that depositors money to invest in real estate.
So far we know that there is a total of $6 billion frozen onto banks, this number is relatively small compared to the Chinese GDP of $17.5 trillion. However, real estate makes up for over 1/3rd of this GDP…
The real issue is the contagion effect, however, given that the government of China controls the module of information that the population can receive via news, social media, or whatever. It may be easier to stop other cities and populations from participating in an all out banking run..
A grime benefit at a hefty cost!
Given that China has ACTUALLY banned crypto this time around, individuals are left to do commerce based on the Yuan, and social credit scores..
How I’m Trading This Market!
I’ve been hearing “China’s going to ban crypto” for about 8 years…
It was a boy who cried wolf story, but now the wolf actually arrived. So how do digital assets and more particularly Bitcoin play into this? First let me show you how I’m trading this..
First here is the Bitcoin chart from mid June to today, look at this choppy mess. This is a scalper’s paradise, just flipping from long to short (Longs=call/Shorts=puts), and over again, I can realize some nice returns.. This range has worked quite well for me lately, if we see clean candle closes (dailys or higher) above 24k, I think we’re in for a relief rally.
Second, if I’m looking more into investing and not day trading– I’m Dollar Cost Averaging (DCAing), assets that I feel like will be around for a LONG time and not thinking much about them. Just putting them in Cold Storage.
For the crypto pick (screw it – here are two I love)- right now I’m looking at DCAing into Polygon (MATIC) and Algorand (ALGO). These are long term holds for me. So I’m putting them in cold storage. Which is always the safest way to store your digital assets.
So, how does crypto play into the Chinese Banking run?
Well two ways, good and bad. Let’s break down the good first.
The Chinese Banking Run, The Benefits of Crypto
Securing your Bitcoin or digital asset/currencies on a COLD STORAGE wallet allows them to become unseizable by any government entity or nefarious party such as a hacker. Unless, they get what is called a seed phrase.
A seed phrase is a list of words, usually 12-24 that are designated specifically to an individual wallet that acts as a username and password. If you ever lose a wallet or your computer, your seed phrase/recovery phrase will be the #1 method to access your crypto.
This is not the case at all with exchanges like Coinbase,Kraken, KuCoin, Binance, etc., which are centralized fiat on-ramps that would 100% have to comply with any regulation.
(If you’re a complete newbie and want some tips, check this article out.)
If individuals in China can still access digital currencies, where there is a will there’s a way, then they can still participate in the greatest separation of state and money we’ve ever seen.
The Bitcoin network.
The Chinese Banking Run, The Drawbacks of Crypto, CBDCs
Blockchain technology is on a spectrum. Similar to how we can use nuclear energy to power homes or destroy the earth. Blockchain can allow for complete monetary freedom or control. There’s a polarity there.
Now that we have blockchain technology incorporated into finance, and growing at an exponential rate. Central Bank Digital Currencies (CBDCs) allow for a more programmable, and controllable, monetary system.
Say that the Chinese government doesn’t like a citizen’s recent post on social media, they can tax the citizen heavily, take some Yuans, or do really whatever they damn well please with a controllable digital currency.
You may think this development is limited to China but it isn’t at all. More than 87 countries, including the United States, are developing a CBDC.
China is just the testing grounds.
In my opinion, crypto is here to stay, it has many benefits and consequently many drawbacks.
I try to find a way to always bring value to my audience, so there are two ways I’m playing this. Scalping the bitcoin ranges above, and DCAing into long term assets like Algo/Matic and putting them on cold storage.
Getting the big picture is always nice, but let’s take it one step at a time. We’re in a bear market, I have the expertise to trade it. So stay tuned with your boy Jake!
Crypto never sleeps!