Given the recent continuous uncertainty between the US and China and highlighting the global economic slowdown which has been felt this year, around the whole globe, not only in the US – specialists are starting to talk about the upcoming recession which the US is about to go in.
These are ingredients that are foreseen as rather unique and rare opportunities by investors, possibly offering a clear path to a quite noticeable bull run in cryptocurrencies. Although many will automatically consider this a heavenly opportunity which will lead to unimaginable growth and prosperity, there will be many which will be led to catastrophically financial ruin. As Adam Reese very well underlined:
Be wary of jumping into digital currencies as the global economy slows.
Many believe that cryptocurrencies represent a trustful long-term investment, which has the sole role of continuously increasing over time, no matter what happens. Thus, people know that if you invest 1 USD today, you’ll clearly cash-out at least 100 USD in the not-so-distant future. This so-called “fundamental truth” is one of the sources which led to crypto-prophecies. Similar to the One Ring which appeared after Sauron’s first downfall in J.R.R. Tolkien’s masterpiece:
One Ring to rule them all, One Ring to find them, One Ring to bring them all and in the darkness bind them.
There are enthusiasts actively trying to identify and convince other which is the “One True Coin”. However, what is relevant and important here is not the accuracy of these myths, but the fact that people actually believe in these folk-tales.
Basic economy and a history thought us that if there are clear signs that a cryptocurrency price will rise once markets tank, the only rational and efficient thing to actually to when a recession starts sending out signs is to completely load-up on the cryptocurrency you are so confident of. Although this might seem complete nonsense to some and a madman’s decision to others, once there are enough people to repeat the same action, together they can move prices up more than initially expected – this is the result of the power of masses. Undoubtedly, the cryptocurrency markets are still rather young and considerably small, when you compare them to equity markets. As a direct result, the crypto markets respond to smaller trading events with greeted impact. To put it simply, a group of independent actors, which are independently buying or selling the same coin, at around the same time, will uncountably and quite noticeably affect prices.
This leads us to the “American Dream”, which, according to Investopedia, is the belief that anyone, regardless of where they were born or what class they were born into, can attain their own version of success in a society where upward mobility is possible for everyone. The American Dream is achieved through sacrifice, risk-taking, and hard work, rather than by chance.
Having this in mind, if you look around, people are struggling to best respond to day-to-day challenges of economic instability, insecurity, stagnation, and unpredictability. People all around the world, US included, are wondering whether it’s still possible for good careers and financial security and stability are still within possible reach. The best way to live that ideal American Dream is to buy low, sell high, invest and then live the life you’ve always dreamt of.
Despite all the good signs and obvious advice which can be given towards taking risks and jumping into cryptocurrencies, the best advice is to be careful and take into consideration some good old-fashioned risk management. If you are at the beginning of your crypto-journey and you plan to learn as you go, a recession combined with a bull run can be the most dangerous time to start making high-value crypto decisions, which could affect your well-being. You can always learn during your lifetime, but you can’t turn back time to redo what you’ll come to regret.
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