2023’s been a turbulent one in the digital asset space, but why should you care if you’re not into crypto? Because what happens in the open with blockchain may occasionally happen in the shadows with traditional finance. Also, regardless of how you feel about it and considering the most likely scenarios: This is the future.
It’s a very tentative mission accomplished with regards to the battle on inflation – I like to be balanced here and consider both options, but there’s mounting evidence, and what happens with the price of bitcoin is one of them, that greed may be sneaking back into the market. Perhaps a reduction in interest rates – perhaps a shift back to the centre or even a bit to the right in the political realm—all point to stronger tailwinds ahead—or at least not a massive headwind like we’ve been feeling recently. Our global economy, with debt structures on the knife edge – is desperate for cheaper credit.
In New Zealand recently for example, we’ve seen a new government come to power who’ve decided to restore some of the tax rules that made property investment a viable asset class in the past. We’re also getting much needed tax cuts which may offset the pain from inflation for those carrying the biggest load. Our central bank is being given a much more narrow and simplified mandate – focus on inflation. How good is that – they’ll soon have one job to do – So there’s hope that both for the RBNZ, and the government will do a better job of dealing with inflation in the future. As investors, this means more stable interest rates. It’s about confidence.
On the other side of the coin – it’s also a confidence that could go too far. Too much cash still in the system, or too much greed, even by fewer players, could make assets take off. Need more evidence that risk is making a comeback. Go no further than crypto. I believe it’s not just about making money with investing, it’s about preserving your ability to do with your wealth as you wish in a digital age. Many investors don’t view it that way however – it’s a way to get rich. I feel decentralised finance, and bitcoin specifically, really can change the world. Whether it be for world peace and kumbaya or an outsized good return – don’t dismiss crypto without first doing your own research.
Recently, the SEC, the US regulator, took down another high-profile player in the crypto ecosystem, using a strategy called regulation by enforcement. For the layman, that means punishment without clarity on the rules.
It may be the only way for regulators to do their job. Still, I wonder if crypto regulation authored by the most trusted industry participants may be a better way. Afterall, was it not banks who created and still maintain the US Federal Reserve System? Did they have to endure regulation by enforcement from an outside authority?
Meanwhile it’s almost 2024 and the price of bitcoin has more than doubled from the start of the year. If your financial adviser or fund manager’s been successful at keeping you safe from this returns, maybe it’s time to have a fresh conversation with them around why. I’ve been banging on this drum on for over 5 years but again, it’s not for the gains, it’s for the protection to your wealth it can offer.
Anyway, what’s causing this price rise? The bitcoin halving event, the rise global liquidity, the victory over inflation?
Today, I have three guests from Easy Crypto, a company that makes it easy for anyone to buy, sell, and now store crypto in New Zealand. They are Janine Grainger, Paul Quickendon, and Johannes Gertz. The NZDD, a stablecoin pegged to the New Zealand dollar, and a new digital wallet with a novel approach to security.
Crypto or digital assets should be looked at as a legitimate tool everyday investors can use to build wealth. A small allocation to this space is as much about creating a wider spectrum of diversification, as it is a chance to achieve outperformance in the digital age. Do your own research here, but if you’d like to get started with crypto, reach out for advice first and get a strategy – then check out the referral code in the notes to sign up with Easy Crypto, the main sponsor of this show. Help support the show in the process – but use the same provider I use to regularly buy a little bit of crypto as part of my overall investment strategy.
