How Does Crypto Solve It's Liquidity Issue

bitcoinflood in #hive-167922 • 2 years ago

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How Does Crypto Solve It's Liquidity Issue

Liquidity is a hot topic as of late. Cryptos liquidity has been low for a long time including hives. Its only become recently apparent how much liquidity issues traditional fiat systems have as well. But the real question I care about is how do we solve the liquidity issue currently in crypto and in particular that of bitcoin as of late.

The Banking Sector

The banking sector is currently under major issues and goes to show the world now even more so how incompetents our government is and in particular the SEC is.

We have seen a rally cry in the crypto sector again as people realize that not even banks are a secure place to put your money anymore. While the federal government is trying to say it is and buying out banks the damage has already been done and shockingly the USD isn't so in demand as it once was and it's starting to wreak havoc not only here at home but around the world.

People seem to be exiting out of the fiat world and piling back into the crypto world and we might see this take root even more as the SEC tries to buckle down on everything. If it wasn't for the SEC mess right now I honestly believe we would be back close to the 3 trillion dollar market cap again.

Bitcoin was born out of the the banking system crash of 2008 and personally I went through that early on in my years of starting to work and invest. About 5 years of blood, sweat and tears along with many long hours of overtime got nearly wiped out in my 401k etc. Talk about a real blow to the gut when first coming out of high school into the job force.

It was after that I started to work for myself and will never look back.

Liquidity In BTC and Crypto

Right now liquidity is low and while that means prices will move quickly it also means they can move quickly in either direction. There's a 10 month lower at the moment on BTC liquidity and what that means is there's a smaller amount of btc being offered up for sale.

Because of this increasingly small amount of liquidity which is only getting worse at present we could see bitcoin shift rapidly either up or down and so far the bet seems to be up due to the current banking crisis.

Solving Liquidity

It really is just going to come down to supply and demand. Right now for crypto many tokens are in limited supply for example bitcoin is at 21 million max of which I'm sure at least 1 million are lost forever in wallets etc. We are also on the tail end of printing for bitcoin at least in any substantial way. Ethereum also is in a deflation move at the moment and that most likely will only continue to increase as activity on the network increases again.

Hive on the other hand could quickly turn around. With defi platforms like CubDefi we have seen a rather large increase and move in HBD and hive across that network. I'm curious what will happen once we kick into that 30% market cap which is starting to creep up on us. So far only few have really seen the massive value in moving floods of money into HBD and earning that juicy 20% APR which at some point will most likely become unstainable for the network and have to be reduced some. That however all comes down to the market cap of Hive itself.

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2 years ago in #hive-167922 by bitcoinflood

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poshthreads 2 years ago

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poshtoken 2 years ago

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rzc24-nftbbg 2 years ago

People seem to be exiting out of the fiat world and piling back into the crypto world.

I suspect some attempts at policing such exit here in our country that started early last year by asking owners of mobile phones to register their SIM cards again. Of course, they sell such a move in the name of protecting mobile users from bad actors.

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ijatz 2 years ago

In which country do you live?

And yes, the best practice is to use crypto wallets & apps from a desktop computer only, where we can - to a large extent - control the parameters of our communication (through VPN's, Tor, etc.).

And if a microwaves phone is required, be it a Linux phone, like the Pinephone - because on an Android or iPhone, the bad actors your government is referring to have access to your data (Google & Apple in the first place).

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rzc24-nftbbg 2 years ago

The Philippines. I observe just recently every time I do an online transaction, I now receive a notification to register my SIM. When I bought my phone, it has already been registered. So this is a kind of registration that has a different purpose in mind. I forgot the exact month they passed the SIM Registration ACT.

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michaelklinejr 2 years ago

Liquidity is a movement issue. HODL is pure illiquidity. Staking causes a lot of illiquidity, too. The measurement of an economy's success is how often it's value is moved from hand to hand, not how much a person holds of it.

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ijatz 2 years ago

bitcoin is at 21 million max of which I'm sure at least 1 million are lost forever in wallets etc.

Sure! Most sources I've seen evaluate the amount of "irrecoverable" BTC at around... 3 million coins. For instance: https://blockzeit.com/how-much-bitcoin-has-been-lost-forever/

So far only few have really seen the massive value in moving floods of money into HBD and earning that juicy 20% APR

Do you know through which mechanism(s) such an APR is reached? Have the CubDefi devs found pools in other cryptos that provide them with an even higher yield, so that they're able to pay that 20% interest in Hive?

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