SVET Reports
Block To The Future
After I’ve made public my views on the current events (re: “Wrack To The Future”) the next article’s header has become obvious :)
So, how those unprecedented developments on the world stage, which are now enrolling right under our wide open (but carefully protected) eyes, will affect DLT industry?
Let’s see:
1) Old maxim that in times of global crises cash is the king has been re-confirmed as USD continues to strengthen against all types of assets. Sure, we may argue that gold’s dip was only minor and that BTC has started to feebly demonstrate some counter-trend behavior. However, for DLT startups, which were too actively burning their proceeds from 2017–2018 ICO bonanza, staying cash positive might become paramount in the medium and long terms (specially, if we face the next leg down on the markets);
2) As more and more Millenials and Z-Gens around the world get imprisoned in their homes by their own states’ bureaucrats and become cut off from habitual sources of revenues we can expect that (in the mid- to long-terms) new generation of freshly-cooked crypto-currency “speculators” will hit exchanges books with thousands of haphazard “market orders”. Some of them might even turn their heads towards more “respectable” DeFi instruments (f.e. staking). The only question is: Will they still have any money left to play those expensive games?
3) We, obviously, can’t ignore the $6 Trillion worth elephant in the US Treasure room. Allegedly, that is a gov-given chance for crypto-currencies to shine. FED is expected to dump on the market almost 150% ($6 trillion) of the entire US gov holdings ($4.5 trillion). Of course, it’s absolutely epic and, on a surface, it creates an historic opportunity for BTC to fully unleash its “store of value” power on all of its opponents. However, we should also consider that BTC appreciation might be dramatically skewed by the deflationary spiral, faced by which some whales (specially belonging to the “older generations”) might choose to dispose of their crypto baskets in behalf of massively devalued and much less risker (from their perspective) “blue ships” of Finance 1.0 universe. Additionally, demonstrated gold’s relative stability creates an additional downward pressure on all assets markets.
4) Another controversial present we might all receive from federal authorities is the “digital dollar”. Many in our community expect that “dollar going crypto” will open the side door for all our DLT projects as well. However, we shouldn’t be holding our breath for that. First of all, even if this DEM’s proposition passes the Congress, it will inevitably hit the wall of partisan politics and general technical incompetence of gov bureaucrats. Despite all current posing and proclamations it might take years before we see freshly minted USD hitting our newly DARPA designed e-wallets. What happens then? It might only change national governments from being confused and incompetent opponents of crypto-currencies into their omni powerful and ruthless competitors.
5) An another unsubstantiated expectation is that this crisis benefits new DLT projects developments, because, theoretically, an increased unemployment will push labor prices down and helps inspiring entrepreneurs to launch their products for fraction of the usual costs. That will not happen because the number of highly qualified devs, which are needed even for lesser kinds of Dapps, still remains limited as the demand from self-proclaimed DLT “entrepreneurs” will only go higher.
6) Now, what about that authoritarian tendencies which we see taking roots all across the traditionally more liberal Western hemisphere. Would as a result many citizens be asking themselves a simple question: If my democratic government is capable in a single day to turn 180 degree and to order me and all people around me to “self-isolate” (which, factually, means the demolition of millions of private businesses), may be the same government might take from me all of my gold and savings using the similar bureaucratic “ordnance” during the next “crisis”? Will it drastically increases our ranks with new followers? Highly unlikely. The great majority of people tend to panic — not to think — during the crisis and try hard to forget it the next instance it passes without any second thought.
Overall, from all those wild rumors and dreamy expectations, which are now circulating in our community, there is only one, which might have a significant upward influence if it’s fully realized — that of the US Treasure going wild with its printing press. However, even if each and everyone of 326 millions citizens start receiving UBI the next month they won’t spend it on crypto, right? :)
I believe that at present we all must keep our heads clear and do not expect free lunches and unicorns springing at us from this global turmoil. Sure, some new opportunities will come our way, but we can’t foresee them now. That’s the nature of all big crises, which is the demolition of the past and the creation of unexpected and unintended.
All we can do now is to continue holding or noses to a grinder and to do our jobs as best as we can in order to keep our businesses running and our communities alive.