Has Macro killed crypto or are risk -to -risk lenders to blame?

Has Macro killed crypto or are risk -to -risk lenders to blame?

cryptoma markets are directly in the toilet. Bitcoin is traded around $ 22,000 - almost 70 % under his all -time high in November. Ether it was somehow worse.

The collapsing credit platform Celsius is a simple scapegoat for the widespread slaughter. Rumors about his bankruptcy preceded the native Celsius-token Cel, who lost 50 % this month. Since then, the platform has blocked users from its accounts while arousing various levered defi positions.

Just a few weeks ago, the markets staggered from the implosion of the Terra ecosystem, which destroyed the ninth and tenth token after market capitalization and thus a representative value of around $ 40 billion.

But macroeconomic factors such as inflation, interest rate increases and the war in Ukraine have dropped the technology -heavy Nasdaq and the wider S&P 500 by 30 % and 20 % this year, since the USA flaps with a recession. Meanwhile, raw materials are increasing, with the reference index S&P GSCI has increased by more than 40 % since the beginning of the year.

It is clear that investors switch from “risky” assets such as crypto and technology shares to more recessive titles.

This all represents a classic henne egg problem: Celsius led to the cryptocurrency lost more than 25 % of their total value in the past week, or simply reduce investors to the risk?

The great risk reduction

Anthony Scaramucci, managing partner of the Hedge Fund Skybridge Capital, told Blockworks that he was not surprised by falling crypto prices. Skybridge offers an institutional Bitcoin fund and other vehicles that have been developed to offer crypto engagement of limited partners.

"You have a low -risk market, an oil crisis that has arisen from the current war environment, and you have the traces of pandemic," said Scaramucci. "In addition, we may not feel it so much in Europe and the United States, but they go through the 'zero-covid' lockdown strategies in China, and that has enormous effects on the supply chain."

The precarious macrol landscape-combined with too much money in the pockets of the dealers due to the US business measures-has led to high number of inflation, which caused a correlation over several investment classes, as with technology shares and bitcoin.

"Bitcoin is increasing more in a lively market than the market," he said. "In a oppressed, depressed market, things will go even further."

The increasing inflation postulated by the financier is probably not system -related or secular, but also emerged directly from the persistent crises mentioned above.

"In a year we could very well be out of the pandemic, and the number of inflation could actually tend downwards," added Scaramucci, who this week said CNBC Skybridge had just bought more Bitcoin and ether. "The future of the Internet will include these decentralized technologies - I am incredibly long -term. For this level of volatility you just have to have your stomach."

macrofactors put sustainable digital assets openly

JEFF DORMAN, Chief Investment Officer of the crypto investment company Arca, said that the subdued macro farm caused some participants to take additional risks.

"I think Macro leads to problems with Celsius instead of Celsius to problems for the market," said Dorman. "If Bob gives me a Bitcoin (BTC) and I pay 2 % interest for it and then borrow Alice, which pays me 3 %-that's easy. I have a one-to-one-a-asset-liability match. And I make 1 % net interest on the spread," said Dorman.

But problems arise when Bob gives five BTC, but only wants to borrow Alice. The lender still has to pay 2 % to his five BTC, but Alice pays the lender only 3 % on one.

"Now I have to find out how I can make up for this yield," said Dorman. "So what should I do? I will do risky hedge fund shit to compensate for this return, and hope that nobody knows what I do-because nobody cares because it is not regulated. Here these companies get into difficulties: they basically operate like not registered hedge funds."

But Dorman rejected the current zeitgeist, which demands that investors throw all digital assets into a pot in order to consider them as a huge risk deal, with Bitcoin being the slightest risk outside of stable coins.

to believe that Bitcoin is king and everything else is an old coin is an "archaic way of thinking about this market," he said, the equivalent to describe the S&P 500 as the only ETF and anything but less alternative ETF.

crypto investors could ask: What does the risk reduction look like if there is no complete exit from the markets for digital assets?

Defensive Digital Assets

Of course there are stable coins, some riskers than others. (Skybridges Scaramucci said Circles USD Coin and Tether remembered remarkably well during the youngest chaos, with both companies processed with returns worth billions of dollars without downtime.)

Scaramucci suggested investors to stay away from Leverage, and said: "Stay freely. orient yourself in the long term. What caused the positive surprises and the negative surprises is the leverage in the system."

for Dorman from Arca, the persistent price correlation in crypto is more the result of an immature class of investors than something that is owned by digital assets.

"In theory, Bitcoin has nothing to do with Axie Infinity that has nothing to do with BNB," said Dorman. "But if a type has all three and you use these three as security to do something, they will be forced to sell all three at the same time."

crypto exchanges should be resistant to market swings in a mature market (there are already some hints), while native assets for block chain-powered games should even prove to be resistant during a recession, said Dorman-as long as the tokens are sustainably structured.

"What are the areas in the world of digital assets in which investors do not stop what they do, just because of a bad market or because of a recession: gamers don't stop playing because of a recession," he said. "If at all, they actually start to play more because they have more time and do not work. Gaming should theoretically be a defensive sector."

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The contribution has killed Makro Krypto or are risky lenders to blame? is not a financial advice.