What is a crab market?
19th July 2021 |
What do you think of when you picture a crab in your mind?
Here’s what I see…
A red, bug-eyed crustacean with pincer claws “crabbing” sideways along a wet, sandy beach.
It may be fair to assume you’re thinking something similar.
It’s that “crabbing” motion, the sideways movement that’s particularly relevant to us right now in crypto markets. It’s a term that frankly I’d not really heard of before, but recently it has been the most appropriate way to describe how the crypto markets are behaving.
Crypto markets are not booming, nor are they crashing.
They’re crabbing.
So it’s fair to say there’s no bull market right now and no bear market either. We are in a “crab market”.
When the market behaves like this, what are you to do?
We’re a long way down from the highs earlier this year, but also a long way off the bottoms of the year prior.
Are we in a weird Bermuda triangle zone where crypto flies in but never flies out? Is this the “new normal” to expect from the market going forward?
Is it all “going to zero” or …
… are we about to go to the “moon” and celebrate Lambos for all?
The correct and only answer is that we don’t really know for sure.
What we have to do is draw on our experience, our knowledge of the crypto ecosystem and look at all the moving parts to form a position on where we believe it will head over the coming months and years.
For me, it’s a simple answer, and one that shouldn’t surprise you.
The short-term “crab market” is nothing to worry about, because the long-term fundamental position of the crypto market (in general) is very healthy, very robust and very exciting.
Short term, it’s annoying to see things where they are. But as we very well know, no markets ever head up in a straight line. There is no such thing as “up only” without a few periods of down, sideways and everything in between.
This is just one of those periods where you need to continue to exercise patience, understand the long view we have in place and continue to smartly build your portfolio with risk capital being put to good use.
That means utilising the opportunities that our new money system opens up for us.
I’m talking about building your base should the market “level up” – or head higher as cryptocurrencies gain ground relative to fiat currencies.
In this context, building your base means doing things like:
Staking: ensuring that with the crypto in question, you’re effectively delegating and earnings staking rewards to build your underlying base of ownership in that token.
Earning crypto interest: with the right platforms, with the right crypto, you can earn anywhere from 4% to 12% on your holdings. If you haven’t yet read my “New Money” report about the YouHodler platform, then you should. If you have read it and aren’t using it, why not?
Yield farming: this is a far more complicated and risky strategy to maximise your crypto returns. And it requires an advanced knowledge of how to set up wallets, transact and then interact with the right decentralised platforms. But yield farming can be lucrative and build your crypto stack if you know how to do it in the right way and can understand the risks involved.
These are all aspects of a “new money” system that the entire global financial system is just waking up to. The big money of the “old money” system hasn’t yet started their shift into it, but they will, once they understand the potential here.
But while they dilly dally about, you could be maximising your crypto earning potential all while the market is “crabbing”.
The key point today is that in all market conditions you have a chance to build “new money” wealth when you’re armed with the right information and the right strategies.
In a bear market, you can build positions that previously may have been out of reach. In a crab market you can consolidate, strengthen and continue to earn. And in a bull market… well, if your portfolio is ready for it, then the sky is the limit.
And in my view, the hardcore bull market is still around the next corner.
It will come, but you need to be patient.
While you are waiting, you should continue to learn, understand, and earn where you can.
Confusion about buying crypto and the Binance “ban”
I’ve had a few emails from people about the difficulties in buying crypto. I’ve had emails stating that certain banks continue to prevent them from shifting their fiat money (such as GBP) into crypto.
Most notable has been the recent news that Binance had been stopped by the Financial Conduct Authority (FCA – the relevant regulator) in conducting activity which would normally be overseen by the FCA here in the UK.
That piece of news is true, and it happened on 26 June, when the FCA banned Binance Markets Limited from undertaking, “any regulated activity in the UK”.
There’s not a whole heap of information as to what that really means.
However, crypto buying and selling isn’t a regulated activity. As such you can still use Binance. I know because I have done so.
The tricky part is some banks are now using this as an excuse to label Binance a scam and are preventing people from using their money to buy crypto through Binance at all.
Some banks, however, are not.
I tried to buy some crypto through Binance using my debit card with one of my bank accounts. This one was with Lloyds Bank. The initial attempt was blocked.
I then was alerted that suspicious activity was noticed on my account, and to reply if it was or wasn’t me. I replied it was. Ten minutes later I was able to use Binance and make the purchase without any issues at all.
Hence, it’s really hit and miss as to whether Binance is or isn’t useable through some banks. What I will also note is that you can switch banks now quite easily and that if your bank is preventing you from doing anything with your money that you want to do, then it’s worth considering whether it is the bank for you.
Furthermore, Binance isn’t a scam. And I challenge any bank to prove otherwise.
That said, Binance isn’t the only exchange or platform out there. There are others to get crypto from. You should reference our Ultimate Starters Guide to Crypto and the Crypto Treasure Chest if you want more information. Alternatively, you can always write in to us to ask for more information.
IOTA migration to Firefly update
The IOTA hardware wallet integration with the new Firefly wallet is taking ages. It’s incredibly frustrating, and annoying.
Unfortunately, it is sometimes par for the course with crypto development.
These things take time. Dates are promised. Dates are often missed.
We are dealing with experimental and risky early-stage technologies here, so it’s not unexpected for delays like this as frustrating as they are.
On July 17 Ledger announced an update regarding this on its Twitter page.
It says:
An updated Firefly Ledger build was released to testers on Friday. They are now testing the Ledger migration flows and all remaining elements. There are a couple of bug fixes still to do and then anything that comes up in testing. The JavaScript side has now also been audited.
That means it’s close, but still not here. We will continue to keep an eye on developments, but for now it’s still not ready.
Crypto to Know
Below is our “Crypto to Know” list where you’ll find several cryptos that we think you should be taking the time to learn and understand.
They each form an important part of the burgeoning crypto ecosystem.
Several of these cryptos are doing very different things to others.
What’s key is to learn that every crypto has its own use cases, its own guiding principles, and its own particular potential.
Each crypto is to be judged and assessed on its own merits.
Our aim here is to help you understand these cryptos and the wider crypto world.
These aren’t specific recommendations but a guide to help you learn and build your confidence in operating in this space.
We will add more names to this list over time. However, if you’re new to the world of crypto, these are the names where we think you should start your education and learning.
We’ve also added links to each one.
The links are to what we believe, in each case, is the best resource for learning about that crypto.
“Crypto to Know” watchlist
- Bitcoin – bitcoin.it/wiki/Main_Page
- Ethereum – ethereum.org/en/what-is-ethereum
- IOTA – docs.iota.org
- Tezos – tezos.com/get-started
- Uniswap & 1inch – uniswap.org/faq & help.1inch.exchange/en
- Filecoin – docs.filecoin.io
- Cosmos – https://v1.cosmos.network/intro
- Binance – https://www.binance.com/en/about & https://research.binance.com/en/projects/bnb
Sam Volkering
Editor, Sam Volkering’s Crypto Network
