There's a lot going on if you haven't been watching I would advise you to at least catch the overall headlines of all of the changes and how it could affect your money and decisions moving forward. For this article I'm going to focus on crypto because well that's what we are all here for right?!
The ability to earn crypto has never been higher and is only going to keep increasing which most likely will bring token values down as rewards often get reduced as there's no longer a major incentive of getting people on board is over and instead now the place needs to generate enough value to please everyone which often drives down values of the revenue generated.
It really depends on the structure of how the entire system is setup, the ability to catch and dismantle or eliminate any cheating or ways people are circumventing the system in which they should be earning (and trust me there's A LOT of that going on) and well overall the fee structure, burns, staking and many other factors but primarily it comes down to revenue generation and supply vs demand of the token at any given time.
The Banking System
Right now the rule is still in place which makes Banks label crypto current assets as a liability. This is because the price of the token could crash to nothing, it could be stolen and price volatility. This stopped banks from even bothering with the asset and is what is often known as part of operation choke point which was a series of moves by the government to make it unfriendly to banks and others from getting and holding the asset.
Which makes sense, imagine having your own Fiat paper money and people start wanting it less compared to something else. That's a high risk to your worthless paper money that is suppose to represent something. This is why hard assets like gold and silver are often solid plays a big factor for most people as the asset should continue to hold its value. As paper money can continue to inflate the inflation rate of gold and silver is often known and slowly reducing. I mean at least until we start to mine asteroids!
However this has change recently with the banks and allow them to start to stock pile crypto as an asset much like the government is preparing to do as well. The question is will they? or has the damage already been done?
Waiting Game
I think what we are mainly waiting for now is for someone to pull the trigger. You see it wasn't until people saw the massive wild success of MicroStrategy that others started to get involved as well. From there we still need to see banks start to do it and see their success with it and then others will follow and then last but not least would be governments.
All of this will however take time and wont happen over night. Sure these things should be positive and bullish for the crypto markets but I as an OG from 2011 look at it as getting sucked back into the system that bitcoin set out to overrule and be a better alternative.
The Bullish Case
While we still get some wild levels of bitcoin predictions of $500,000 and $1,000,000 which don't get me wrong could happen at some point. The main bullish point for me was a max of $114,000 for the bull run which I'm happy to say that prediction from 3 years ago has been rather spot on.
Now if there was bank adoption and the government started to stock pile it I honestly would be more around the $150,000 mark and not some crazy $500,000 like others are saying.
That's because I just don't see major governments in huge debt taking on a wildly crazy asset in bulk nor banks. It's just too risky compared to other solid alternatives they have been using for decades.
The play
The play for me would be DCA dollar cost averaging into assets I believe in. I also would want to do that with assets that are generating some type of revenue be that stablecoin or crypto tokens.
Now the while looking at staking tokens you'll see some wild high APRs but don't be fooled this are often the most likely to come crashing down under the weight of their inflation. Instead look for something more normal like a bank would give you 2%-5% as those most likely will do better in holding their price. Of course you could get really lucky and on that inflation the token price goes up.
Posted Using INLEO
Factors that affect the sustainability of any crypto project are not only the earnings mechanism, but also how fraud is handled, the fee structure, burn mechanisms, as well as supply and demand.