Crypto Market Crashing Don't Panic !!!
James Gives An Astute Explanation
James of MoneyZG gives a detailed explanation of the current downturn in the Crypto Market Prices.
He ties it together with what’s going on with the Fed.
THEY JUST CRASHED CRYPTO – Warning to Investors
71,668 views
Jan 6, 2022
343K subscribers
Crypto crash: The Fed just crashed crypto. Enter the giveaway: https://gleam.io/QGdAd/moneyzg-pionex… MoneyZG Crypto Course: https://moneyzg.academy Trade on Bybit (Deposit Bonus): https://bit.ly/Bybit-ZG Celsius Wallet $50 BTC Bonus (use code 1530957b9a): https://bit.ly/Celsius-ZG Best Crypto Tools & Deals: https://moneyzg.co/tools FOLLOW ME: Twitter: https://bit.ly/Twitter-ZG Instagram: https://bit.ly/Instagram-ZG TikTok: https://www.tiktok.com/@moneyzg TIMESTAMPS: 0:00 Intro 0:55 Charts 3:00 Why the market crashed 11:27 It’s different this time… 15:04 Valuations USEFUL VIDEOS: Pionex Guide: https://youtu.be/KLnW0U3IGmE Celsius Network: https://youtu.be/IhTJl-a9g-Y This video is for entertainment purposes only. It is not financial advice and is not an endorsement of any provider, product or service. All trading involves risk. Links above include affiliate commission or referrals. I’m part of an affiliate network and I receive compensation from partnering websites
Chapters
Intro
0:00
Charts
0:55
Why the market crashed
3:00
It’s different this time…
11:27
Valuations
15:04
Crypto Market Crashing Don’t Panic !!!
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FULL VIDEO TRANSCRIPT
00:00
the fed literally just crashed the
00:01
market on purpose this is one of the
00:03
most bearish and hawkish meetings the
00:06
fed has ever had and they’re doing it
00:08
for a reason and that reason is
00:10
inflation i want to talk about that in
00:11
this video i want to talk about how that
00:13
affects the crypto market and the
00:15
outlook that we have for the immediate
00:17
short term and the median term this year
00:19
is crypto just something you shouldn’t
00:21
be in is it all over what is going to be
00:23
happening to the prices i’m going to go
00:25
through all of the points um that have
00:27
really you know seen risk off in the
00:29
crypto market and in tech as well
00:31
generally over these past few days um
00:34
and i want to talk about that and how
00:35
it’s going to affect us and where i see
00:37
that going forward so let’s get into the
00:38
video
00:39
firstly i do actually have a crypto
00:41
giveaway in january so go and check that
00:43
out i’ll leave the link in the
00:44
description giving away ten thousand
00:46
dollars uh six thousand to one person
00:48
two thousand to two people that might
00:50
really help you out and i hope it does
00:51
so check out the link in the description
00:53
if you want to enter that so um going
00:56
through to the chart we can see this big
00:58
sell-off and this area of value that
01:00
we’ve been seeing this consolidation we
01:02
are we we’re out of that now right so
01:04
we’re not mucking around anymore we’re
01:05
not seeing well it might go up it you
01:07
know what’s it going to do this is very
01:09
clear now we are in a risk risk-off
01:11
phase of the market and the reason why
01:13
we got this big sell-off suddenly is
01:16
because of um the minutes the minutes of
01:18
a fed meeting in december i want to go
01:21
through that and i want to go through
01:22
why that’s important
01:24
a lot of the bad things that they were
01:26
saying and some of the potential upside
01:28
that i see
01:29
as well because this meeting was in
01:32
december in mid-december and things
01:34
actually have changed in a month so i
01:35
want to go through that in terms of
01:37
technicals if you are looking at bitcoin
01:39
i’m really seeing 40 000 as an
01:41
absolutely monumental area of support
01:44
for the price we have a massive area of
01:46
value there you can see it was
01:47
resistance up here three times you can
01:49
see it was resistance right here once um
01:52
and then broke through and then it was
01:53
support um during a sell-off there so
01:56
that is a massive next area of
01:57
resistance and i just see basically
02:00
clear um a clear path to 40 000
02:03
considering um we are really you know we
02:06
might bounce a little bit a dead cat
02:08
bounce from a sell-off but at the moment
02:10
the market is waiting on really the next
02:12
economic figures there’s a lot of worry
02:14
right now and so everyone is risk off
02:16
and the fed has told them specifically
02:18
to be risked off
02:20
so what i mean by that is that there
02:22
were minutes and these are the minutes
02:23
you can go and read them of the fed uh
02:25
the meeting of the you know the fed
02:27
committee um and it was very very
02:30
bearish in terms of their outlook um in
02:33
terms of inflation and the the fed has
02:36
two remits the first one is full
02:38
employment and the second one is
02:39
inflation they call it price stability
02:41
their um their remit is to make sure
02:43
that inflation doesn’t get out of hand
02:45
and they do and they control that
02:47
through interest rates and
02:49
money printing basically and we know
02:51
that they’ve printed a lot of money i
02:52
want to give you um
02:54
really a synopsis of this uh meeting and
02:57
go through it right now so you can see
02:59
this on screen
03:00
firstly um
03:03
the the main points here are all kind of
03:05
pretty
03:06
pretty bad for um
03:08
what we call hawkish from the fed right
03:10
so this essentially means that they are
03:12
going to be putting the brakes on the
03:14
economy so when the economy slows down
03:17
obviously asset price is full right
03:18
because asset prices are based on the
03:20
ability of a business to make money and
03:22
grow and if that’s happening a lot and
03:24
everything is easy and money is easy and
03:26
people can borrow money companies will
03:28
borrow money buy back their stock push
03:30
up their asset prices all asset prices
03:32
go up um and cryptocurrencies basically
03:34
are trading
03:36
like um tech stocks now and that’s
03:38
because they are right basically we call
03:40
them cryptocurrencies we call them
03:41
tokens but you know everything except
03:44
for bitcoin really is a technology stock
03:46
if you want to call it that bitcoin is a
03:47
little bit different um with different
03:49
properties we won’t get into that now so
03:51
firstly the balance sheet they said is
03:53
bigger than normal
03:55
um i should actually undo that and have
03:56
this in red because it is very bad um so
04:00
comparatively to previous times where
04:03
they’ve had to bail out the economy and
04:05
this is you know um a leftover of what’s
04:08
happened over the last few years the
04:10
balance sheet is way bigger than other
04:12
times where they’ve bowed out the
04:14
economy um and you can see the charts on
04:16
that right so you can just see how big
04:18
their balance sheet is and how much
04:19
money they’ve printed this is obviously
04:22
incredibly worrying for them right there
04:24
the whole point their remit is to
04:26
obviously not have a massive balance
04:28
sheet printing loads of money so
04:30
obviously that’s bad and they’re going
04:31
to want to um they’re going to want to
04:34
remedy this the way they remedy that is
04:37
by taking their money that they’re
04:38
putting into the market out and they
04:40
obviously want to stop putting money in
04:42
and actually receive money
04:44
this means that um there’s no federal
04:47
reserve bid for assets right
04:50
because basically what they want to do
04:51
is take money out the system and not put
04:53
it in that’s bad for asset prices um the
04:57
second kind of rough rough ride that
04:59
we’re getting is that they said and this
05:01
is in the minutes this is what you know
05:02
the committee was saying this is the
05:04
highest level of inflation they’ve had
05:06
from uh compared to previous times that
05:08
they bowed out the economy this is also
05:10
very very bad for the economy in general
05:13
now because high inflation means that
05:16
they have to raise interest rates when
05:18
you raise interest rates the economy
05:19
stalls people
05:20
[Music]
05:22
people invest less and you could even
05:23
spark a recession the the dreaded r word
05:26
right you could even spark a recession
05:28
because of very high rates um and
05:31
uncertainty with what’s going on right
05:33
now so
05:34
again this is kind of very hawkish from
05:36
the fed and they’re intentionally being
05:38
so i’ll explain that in a second
05:41
the fed sees more inflation risks so
05:44
back when inflation was skyrocketing six
05:46
months ago let’s say call it four months
05:48
ago and we all saw that we said look
05:50
inflation’s like 10 it’s crazy right you
05:53
had all this anecdotally and in the cpi
05:56
figures um which are lower than actual
05:59
inflation they were saying it’s
06:00
transitory don’t worry about it and now
06:03
later they’re now saying actually no we
06:05
see more inflation comparatively now
06:07
than at other times this again means
06:10
that the fed has to come in the hawkish
06:12
raise rates fears of a recession
06:14
inflation is broadening so it’s not just
06:16
one sector but basically the whole
06:19
economy is out of their control
06:21
completely this is a total mess right so
06:24
inflation is broadening all of this is
06:26
like oh this is awful and we’re gonna
06:28
have to raise rates we have to suck
06:29
money out of the economy and basically
06:31
again fears of a recession supply chain
06:34
issues persist they do yes
06:37
so obviously with more kind of lockdowns
06:40
in various countries including china
06:41
which is a supplier of most of the goods
06:43
again this is not good news
06:46
for inflation and inflation has to be
06:48
dealt with
06:49
inflation now and this is almost a joke
06:52
if if it wasn’t real it would be funny
06:54
but it’s i guess uh you know truth is
06:57
stranger than fiction inflation now is
06:59
what they call partly reversing this is
07:01
almost embarrassing so when inflation
07:04
was very very high months and months ago
07:06
and we all said hey do you know
07:07
inflation’s really high they said no
07:09
don’t worry about it it’s transitory and
07:11
now the inflation is basically high and
07:14
staying there instead of saying that
07:16
they’re now saying it’s partly reversing
07:19
if you can understand that then please
07:21
let me know in the comments signal um
07:24
basically they signal heavy and hard
07:27
rate hikes this is what they’re
07:28
signaling to the market hey everything’s
07:30
out of our control we are going to come
07:31
down hard and heavy on you we’re going
07:33
to raise interest rates hard and fast
07:36
and we’re going to suck money out of the
07:38
economy okay the free lunch is over take
07:41
risk off the market do not um you know
07:44
do not go risk on do not borrow money do
07:45
not grow your business if we can go back
07:48
this is what risk off looks like
07:51
bitcoin is a risk on investment it’s
07:53
traded like that over the past
07:55
few months for sure and we can see that
07:57
when risk is on and we can go back when
08:00
risk is on
08:01
it does very well when the fed says it’s
08:04
time to go risk off then obviously
08:06
people um you know all the investors
08:08
come in and say okay risk is off we’re
08:09
going to stop buying it right so that is
08:12
really what we mean by risk risk off
08:14
just basically you’ve stopped buying
08:16
risk assets and investors have listened
08:18
here’s the the the silver lining to this
08:21
um
08:22
in my opinion the the fed has done this
08:25
for one reason that’s because it has a
08:27
remit to control inflation and so they
08:31
have eventually said look we have to we
08:34
have to control this and they can
08:35
control it through two ways one is
08:37
actual policy actually raising interest
08:40
rates and another one is just coming out
08:42
and saying hey look we are going to
08:44
raise we’re going to have to do this
08:46
we’re going to have to raise rates and
08:47
we are going to basically force you as
08:50
the market into changing the asset
08:52
prices for us you know please please
08:55
kind of
08:56
you know come out of risk assets and um
08:59
you know calm this market down for us
09:01
please do that right and so please
09:03
handle this inflation for us before we
09:06
actually have to step in so in my
09:08
opinion they’ve really come hard and
09:09
fast in december and said look the the
09:12
first thing we can do is tell everyone
09:14
please handle inflation for us or we’ll
09:17
step in
09:18
so here’s the other silver lining i
09:20
think that um all of the the virus fears
09:23
are kind of already over right i think
09:24
the peak that we were seeing it
09:26
definitely isn’t as bad as before and so
09:28
that means everything can calm down and
09:30
people can get back to normal and
09:31
hopefully the supply chain as well the
09:33
second one is that the latest pmi
09:35
figures and jobs reports have been
09:36
pretty good pmi is an inflation figure
09:39
and it doesn’t look to be as high as
09:40
people had anticipated so that is very
09:43
good if inflation’s coming down and not
09:45
as
09:46
what do they call it partly reversing as
09:48
they say
09:49
essentially that means they don’t have
09:50
to be as hard with the interest rates
09:52
and the and taking the money out the
09:54
system people can relax and get back a
09:56
little bit back to normal and so asset
09:58
prices risk asset prices won’t be coming
10:00
off as hard and the jobs look okay
10:03
this is good so as long as you know the
10:05
jobs figures are great this is you know
10:07
fairly good for the economy that they
10:08
don’t have to kind of change anything
10:10
there so
10:11
this is what’s happened to bitcoin if
10:13
you’re saying what is going on with the
10:14
price essentially that the fed have just
10:16
come in and said look we have to deal
10:18
with inflation we’re going risk off and
10:20
there are lots of fears there’s lots of
10:22
fun around with that um but hopefully
10:24
that explains what’s happening and i
10:26
want to get on to kind of um what’s
10:29
going to happen happening over kind of
10:30
the next few months so you know
10:33
essentially
10:34
we’re in a year where there is the
10:36
midterm elections in the states and
10:38
usually if the economy is doing very
10:40
poorly then politicians get removed for
10:43
the opposition party and obviously
10:45
that’s not what uh the federal
10:47
government wants to happen in in the
10:49
state so what they’re going to do is get
10:50
all the bad stuff out the way now and
10:52
say hey everyone we’re going to come
10:53
down hard and fast on you and we’ve gone
10:55
through that but towards the you know
10:58
towards the election time we’re going to
11:00
be a lot softer on the market and we’re
11:02
going to say hey do you know what we’re
11:04
actually not going to raise rates as as
11:06
hard as we thought we would have to
11:08
things are a little bit better than we
11:10
thought and you know we don’t have to
11:12
reduce our asset purchases as much
11:14
and you know we’re happy with what’s
11:16
going on the market will kind of oh
11:18
that’s good and so everyone will feel a
11:19
little bit better going into the
11:20
elections that’s just my opinion on
11:22
things i’m not going to get into
11:23
politics but hopefully this explains
11:25
some of what’s happening right now in
11:26
the market the other silver lining for
11:28
me and why i’m here long term is because
11:31
of genuine adoption and it’s very
11:32
different to short-term movements so if
11:35
you are a member of my crypto course go
11:37
and have a look at that in the
11:38
description if you want
11:40
i talk about you know investing over the
11:41
long term and really taking out market
11:43
movements out of things because things
11:45
happen short term that’s for trading
11:47
longer term is about investing in
11:49
projects that actually fundamentally
11:50
grow and really the growth story for
11:53
crypto is still intact and so you know
11:56
i’m happy to be exposed to this market
11:58
so just yesterday i think it was goldman
12:00
sachs right so you know one of the
12:02
biggest investment banks in the world is
12:04
now bullish on bitcoin after years of
12:06
saying it’s a scam or not even
12:07
mentioning it at all bitcoin will
12:09
compete with gold as a store of value
12:11
it’s it’s pretty obvious by now that um
12:14
you know the world’s largest banks and
12:15
investment houses are all getting into
12:17
crypto and see it as a um an industry
12:20
that will grow and be here for a long
12:22
time so if you can just take out these
12:24
short-term market movements out of
12:26
things the economy is going to affect
12:28
asset prices over the longer term though
12:31
you can be in a growth sector and i
12:33
think
12:34
why i’m in this is because i think that
12:36
this will be a growth sector continuing
12:39
for the long term so one of the things
12:41
uh one of the the kind of areas that is
12:43
very um on right now is you know open c
12:46
volume so this is nft trading so one of
12:48
the things i want to kind of highlight
12:50
is you know crypto isn’t just bitcoin i
12:52
think a lot of people were coming into
12:53
the crypto market through bitcoin
12:55
initially and up until a few years ago
12:57
it really was kind of the only a1 asset
12:59
there and everything else was you know
13:01
just kind of you know very speculative
13:03
and that is still the case with a lot of
13:05
altcoins but there’s just so many more
13:07
use cases now if you’re into crypto and
13:10
you enjoy crypto
13:12
there are many other things you can do
13:13
other than than just investing in
13:15
bitcoin you can lend out stable coins
13:17
for a yield okay so you can de-risk your
13:19
portfolio like that
13:21
even if you just want maybe 10 or 20
13:23
percent of your portfolio in risk assets
13:25
and the rest in a stable coin like the
13:27
us dollar earning good yield you can do
13:29
that so there are many more options
13:31
other than just to say i’m going to
13:32
expose myself to loads of risk um you
13:35
know and deal with the consequences so
13:37
there are things that you can do one of
13:38
the things you can do i’m not saying go
13:40
and trade nfts but it’s a use case and
13:43
these use cases are exploding and this
13:45
for me is why um cryptocurrency the
13:47
market in general will grow over time is
13:50
because there are more use cases than
13:52
just buying and selling something for a
13:53
profit the majority of human beings
13:56
don’t really care too much about
13:58
investing
13:59
but cryptocurrency can help many people
14:01
in many different ways nfts and games
14:04
can bring people on board and create
14:06
revenues for these protocols which means
14:08
that they are much more defended against
14:11
just random speculative ups and downs
14:14
so you can see right here ethereum
14:16
active addresses it’s not yeah it’s
14:18
definitely in a period of consolidation
14:20
right here and this is because the price
14:21
is consolidating obviously when the
14:24
price of ethereum is going through the
14:26
roof you’ve got more people using it
14:27
more people trading it people selling
14:29
out to other new people coming in but
14:31
when the price comes off a little bit
14:33
yes there won’t be as many addresses
14:35
people aren’t doing as much and that’s
14:36
totally fine but the general trend is
14:38
pretty clear to me we can also see
14:40
bitcoin addresses again you know bitcoin
14:42
really for the most part is just um
14:45
a store of value or right we’re going to
14:47
buy this because the price keeps going
14:49
up and when you see the price high you
14:51
get more action you get more people um
14:53
having addresses starting a check
14:54
exchange accounts and trading it
14:56
swapping it out for something else
14:57
swapping it out for some more coins
14:59
obviously when the price goes off that
15:01
um that cools off a bit but the general
15:03
trend is pretty clear again
15:05
what i want to highlight is the value
15:07
that cryptocurrencies can have have
15:09
besides just a speculative bet on other
15:11
people buying it in the future this is
15:14
how cryptocurrencies will be valued on
15:16
their protocol revenue it’s quite clear
15:18
that ethereum is by far and away the
15:20
biggest by protocol revenue so this is
15:22
in the last 30 days they actually earned
15:24
almost a billion dollars so
15:27
this is why i think the market is a
15:28
little bit strange i get that ethereum
15:30
is a risk asset it’s a risk on asset but
15:33
it is also earning a billion dollars a
15:35
month in revenue so hey look it’s a new
15:37
asset and people don’t understand it yet
15:39
but there must be some sort of price
15:41
level for a floor like if you’re selling
15:43
off ethereum maybe you can say well if
15:45
it makes a billion dollars in revenue
15:48
every single month
15:49
maybe you can start valuing this and
15:51
saying having a lot more conviction in
15:53
saying you know what i’m going to buy
15:54
the dip because actually this thing
15:56
isn’t valued that highly you can see
15:58
that the price the earnings ratio for
16:00
ethereum if you just treat it like a
16:02
tech stock is 38.
16:04
38 is extremely low for a massively
16:06
growing ecosystem like ethereum um so in
16:09
the s p i think the average price to
16:11
earnings ratio probably be about 20.
16:13
it’s obviously going to change but you
16:14
know correct me if i’m wrong but
16:16
ethereum with a price to earnings ratio
16:17
of 38 is is not higher in my opinion um
16:21
and i’m happy to you know value
16:24
ethereum as a very solid tech stock
16:26
which is basically what it is that’s how
16:28
i would value it you can see other
16:30
protocols right here you know exchanges
16:33
games they are making money and so
16:35
things that make money and return that
16:37
money to shareholders token holders um
16:40
yeah they have they have value now
16:41
they’re obviously not shares and they’re
16:42
going to be regulated there’s just so
16:44
much fun and uncertainty this is what
16:46
we’re in right now i enjoy it this is
16:48
part of the market cycle happy to be in
16:50
the market in the good times and the bad
16:52
times and just ride through the market
16:55
in general um and over the long term
16:57
obviously hopefully we all hope that
16:59
things will go um pretty well and grow
17:03
over the long term and obviously if you
17:05
want to know more about investing i have
17:06
my investing course i would seriously
17:08
suggest checking it out it goes through
17:10
investing how to set your portfolio up
17:13
for the long term the types of thoughts
17:14
you might want to go through
17:15
diversifying and everything like that um
17:17
i think it really might help you also
17:20
you know enter the giveaway giving away
17:22
ten thousand dollars that link is in the
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description as well i’m james with
17:24
money’s eg cheers for watching and i’ll
17:26
see you in the next one