Feb 23, 2021
Digital Assets, Macro Storms, & VGX
Sarcasm alert… The sky is falling, the sky is falling. Plenty of blood in the streets to make you forget why you are invested in digital assets. We forget crypto is not immune to short term market storms. As an investor, it is important to go back to the data, analyze the radar, and look to the horizon.
If we zoom out and look at the Macro landscape, all eyes are on the bond market. Rates around the globe are rising from COVID lows and the yield curve is getting steeper. This means the market is pricing in higher inflation and an increase in business activity. This is actually a good thing so why are markets reacting so negatively?
The issue is most of the gains in the markets in 2020 where engineered by the money printing machine. We don’t say Brrrrrrr for nothing. This is not just a USD issue, it’s a global issue. Over 37% of all fiat money that EVER existed was printed in the last 12 months. This is global and in all recorded history.
This is a core reason why people are investing in digital assets. This does not mean Bitcoin and other digital assets will rise every day. The fact of the matter is BTC has gotten ahead of its Metcalfe fundamentals in the short term likely driven by institutions (credit to Cane Island Digital Research). This does not change the investment thesis that will take place over the next several years, but does impact the short term.
We also need to remember, many everyday people have made significant gains. Profit taking is part of the process and Rob over at Digital Asset News talked about this over the weekend.
The Sky is Not Falling
Historically, March tends to be one of the worst performing months for BTC. Given the rise in digital asset valuation so far in 2021, March will be an interesting month. We could see a flat to down month which will feel like a loss given the last 8–9 months of gains. Again, this does not change the medium to longer term trajectory of the digital asset market. We also have the prospects of another round of government stimulus. We all know the impacts of money printer. Brrrrrr.
And don’t just take my word for it. Raoul Paul had a spot on thread last night on the exponential trends of digital assets. The benefits of crypto go so far beyond traditional investing. Owners and users are mutually benefiting which makes it so unique. Manage your risk appropriately and look to the future as it continues to be very bright.
VGX & Market Volatility
I have been writing about VGX since October of last year. The reason why I have been so bullish on the asset is because it sits right in the middle of so many macro intersections. 1. The macro wave of people entering crypto. 2. The macro wave of retail financial education. 3. The macro wave of digital banking and everyday services (interest, payments, investing, etc.)
Assets that are designed and built from the ground up for the customers to receive everyday benefits will do very well over the medium to long run. Holding an asset purely for returns has its limitations. To some degree, this is the fallacy with many assets. For many stocks, they allow you to “own” part of the business, but limit you in what you can do with them. The are designed to only go up because that is its benefit. Many don’t even offer dividends. At least real estate gives you a chance to use it for some purpose.
VGX will allow you to get interest on holding, boost your interest on other assets, receive cash back on purchases and trades, put money in your pocket when you refer a friend. And this is just the beginning of these types of benefits.
VGX is not immune to market pressures and dynamics. It will fall during a volatile market, but it will hold its own because customers holding it get everyday benefits. The more people using the ecosystem, getting benefits, and seeing the potential, it will continue to be one of the best performing tokens in the future.
Conclusion
Lots of recent macro market volatility across the globe. The bond market tells us inflation expectations and business activity is expected to increase. This has put a pause risk assets. Digital assets are unique in how they benefit owners and users meaning they continue to be a good long term investment. VGX will also hold up relatively well given its token design for delivering everyday customer value. Storms happen and most are short lived. The best part of a storm is the rainbow after it has passed.
Hope you got some value from my perspective! If you like what you read, take the time to clap for the article below or like it on Twitter. If you have thoughts, feel free to add a comment below to the article or on Twitter.
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Disclosure: I am a current VGX token holder. This is not financial advice. This article is for informational purposes only. Do your own research or seek out the professional advice from a financial advisor.
