Massive #Bitcoin CRASH explained: Evergrande Crisis & why it's BULLISH

Boxmining

29.0K views 1,876 3 years ago

Description

Evergrande's debt crisis caused stock and cryptocurrency markets to tank today. Ethereum, Bitcoin, and Solana took massive fell drastically. This video explains the Evergrande crisis in detail - from ...

Evergrande's debt crisis caused stock and cryptocurrency markets to tank today. Ethereum, Bitcoin, and Solana took massive fell drastically. This video explains the Evergrande crisis in detail - from fears of further stock market drops to a potential housing bubble. 0:00 Cryptocurrency markets bleed 2:32 Evergrande Crisis Summary 4:14 China's Housing Market 6:00 Beyond the Fear 8:00 Bullish on Bitcoin ●▬▬▬▬▬▬▬Recommendations▬▬▬▬▬▬▬● 📖 Guides, tutorials and insights: https://boxmining.com/ Recommendation List: https://www.cryptoatlas.io/Boxmining 🌼Buy & Sell Bitcoin: https://join.swissborg.com/r/michaeOQZM 🔒Hardware Wallet: http://boxmining.co/ledger 👍🏻Brave Browser: http://boxmining.co/brave 📲Bybit Exchange (Most powerful): https://partner.bybit.com/b/boxyt 📲Binance Exchange : http://boxmining.co/binance ●▬▬▬▬▬▬▬▬▬▬Community▬▬▬▬▬▬▬▬▬● Boxmining clips: https://www.youtube.com/channel/UCjFy3VBgOZanySOLhQu6GaQ Boxmining News Website: https://www.boxmining.com/ Telegram Announcements: https://t.me/boxminingChannel ●▬▬▬▬▬▬▬▬▬▬▬Social▬▬▬▬▬▬▬▬▬▬▬● Twitter: https://twitter.com/boxmining Discord: https://discord.gg/9qCpqpZm8G Facebook: https://www.facebook.com/boxmining ●▬▬▬▬▬▬▬▬▬▬Disclaimer▬▬▬▬▬▬▬▬● I'm not a professional financial adviser and you should always do your own research. I may hold the cryptocurrencies talked about in the video.

AI Analysis

Alright, let's dive into what caused the crypto market to tank and why it might actually be a good thing for Bitcoin in the long run! This video explains the massive bloodbath we saw across cryptocurrency markets, with Bitcoin, Ethereum, and pretty much everything else taking a huge hit. The root cause? The Evergrande debt crisis rocking the Asian financial scene, sparking fears of a global financial meltdown. But here's the twist: while it's scary in the short term, this situation might just prove why Bitcoin was built for moments like these.

Here’s a breakdown of what went down and what it means:

* The Crypto Market Crash and Its Source
* Cryptocurrency markets were bleeding, with devastation across the board—Bitcoin, Ethereum, Binance Coin, and Cardano all saw aggressive drops. The only safe havens were stablecoins.
* The immediate cause of this widespread market panic was the Evergrande crisis unfolding in Asian trading.
* The biggest fear is that this could be the next global financial crisis, which is why investors are in such a frenzy.
* The Hang Seng and Hong Kong stock markets were also tanking, showing just how widespread the fear was.
* Even though it's affecting all markets, the focus is on how this fear specifically impacts crypto prices and, more importantly, what the bigger picture looks like for digital assets.
* While many investors are scrambling out of stocks and housing, the feeling is that they'll eventually need to scramble out of the dollar too, which is where crypto, especially Bitcoin, comes into play.
* The more people talk about a global financial crisis, the more the crypto community can confidently say Bitcoin was designed for precisely this kind of situation.
* Ultimately, despite the short-term pain, this situation is viewed as long-term bullish for Bitcoin.

* Understanding the Evergrande Crisis
* Evergrande, a major real estate company in China, is saddled with a whopping $300 billion in debt. They owe money to banks, other businesses, and have a ton of unfinished properties in China.
* The core fear is that Evergrande won't be able to pay its massive debt and might go bankrupt, leaving many creditors empty-handed.
* The worry isn't just about Evergrande itself; it’s that its collapse could trigger a wider stock market disaster. If Evergrande goes down, other companies that have direct dealings with them could also be dragged under.
* This "worst-case scenario" is what's causing the widespread panic and driving investors to pull money out of the markets.

* China's Housing Market: A Ticking Time Bomb?
* Since Evergrande is a real estate giant, its struggles highlight concerns about the broader Chinese real estate sector.
* The Chinese housing market has been incredibly hyped, growing aggressively over the past two decades in what some critics call a "massive bubble."
* Despite the Chinese government's consistent attempts to curb its growth and "let off some steam," the market hasn't cooled down.
* The fear of a housing market collapse in China stems from the continuous rise in home prices and the sheer number of new homes being built.
* Many believe it's only a matter of time before this bubble bursts, and Evergrande could be the "straw that breaks the camel's back," triggering a major crisis.
* A real estate disaster could severely damage the Chinese economy, given that real estate accounts for 15-20% of China's GDP, potentially leading to a global economic fallout.
* The pervasive fear is heavily amplified by both YouTube and mainstream media, which are packed with discussions about a potential economic collapse.

* Beyond the Fear: Why Bitcoin is Bullish
* Despite the panic, the fear surrounding Evergrande might be "bigger bite than it really is," heavily dependent on how the Chinese government responds.
* There's a significant chance the Chinese government could implement a "massive bailout," which would likely avert a broader disaster and keep the problem contained to Evergrande.
* In the short term, Bitcoin is bearish because investors, driven by fear, blindly sell off all their assets, including stocks, property, and crypto. This is similar to what happened during the initial COVID-19 outbreak in early 2020, where massive sell-offs occurred.
* Furthermore, highly leveraged positions in traditional markets can lead to cascading liquidations, forcing more assets, including Bitcoin, to be sold off.
* However, after the initial fear-driven sell-off (like during COVID-19), investors often turn very bullish on Bitcoin.
* With fears in housing, stocks, and even the US dollar (due to inflation concerns and governments running out of options for economic stimulus), investors will need a new safe haven.
* People will start looking at both precious metals and cryptocurrencies as alternatives.
* During previous financial crises, Bitcoin wasn't just a safe haven; it was the asset that saw the most significant growth.
* Bitcoin's original white paper explicitly states it was designed to counteract failures in the financial system. It was literally "made for this" kind of situation.
* The appeal of Bitcoin lies in its fixed supply (it can't be created out of thin air), its mining process dictated by mathematics (beyond political control), and its ability to be transferred globally, positioning it as the "one true global currency" amidst rising international tensions.
* Overall, the long-term outlook for Bitcoin is incredibly bullish in this environment.

* Personal Investment Strategy During the Crash
* The presenter has two distinct strategies: a long-term dollar-cost averaging (DCA) approach and a more aggressive, short-term trading strategy.
* For the long-term DCA strategy, the plan is to continue buying Bitcoin consistently, regardless of daily price fluctuations. Having bought just before the crash, there are no regrets, as DCA is about building a position over time, not timing the market.
In fact, as the market gets cheaper and opportunities improve, the amount allocated to DCA will actually be increased*.
However, for the aggressive trading strategy, the current dip is not* being bought right now.
* There are two main reasons for this:
1. There might be a better timing opportunity ahead. This is a big event, and the fear will take time to subside, potentially leading to another major flash crash in crypto, which is being watched for before taking large or leveraged positions.
2. Personal reasons: Holidays are coming up in Asia, meaning 24/7 computer access won't be possible, which is essential for active trading.
* Instead of active trading, the strategy will be to increase the dollar-cost averaging amount and allocate more funds to the DCA account.
* This is because, even in the medium term, months like November and December historically show Bitcoin outperforming, suggesting strong performance ahead.

Transcript

All right, guys, welcome back to Box Mining. And this video is all about the bloodbath that is happening on the cryptocurrency markets right now. As you can see here, guys, it is just bloody across the board. There's just devastation everywhere. Bitcoin down, Ethereum down, Binance coin down, Cardano down, anything. Basically, the whole market is tanking aggressively today. Unless, I guess, unless you're in stable coins, you're going to feel the effects of today's market. Now, 100%, the reason ...

All right, guys, welcome back to Box Mining. And this video is all about the bloodbath that is happening on the cryptocurrency markets right now. As you can see here, guys, it is just bloody across the board. There's just devastation everywhere. Bitcoin down, Ethereum down, Binance coin down, Cardano down, anything. Basically, the whole market is tanking aggressively today. Unless, I guess, unless you're in stable coins, you're going to feel the effects of today's market. Now, 100%, the reason behind this is to do with what's happening in the Asian trading scene with this company called Evergrande. Now, the biggest fear right now is that this is or potentially going to be the next financial crisis. That is why there's so much fear in the market. And just to tell you, you know, I've been watching the Hang Seng and the Hong Kong stock markets today. It was just tanking. It's bleeding bloody. Everyone's doing a postmortem analysis on that. This video is more going to be focused on the crypto side. So instead of going to every part, we're going to focus on the detail. We're going to focus on what the biggest fear is. And I'm going to talk to you guys a little bit about how this could potentially affect crypto. Sure. Yes, the markets are falling today because of just the fear in investors and as they scramble out. But honestly, I see a different picture. I see a bigger picture here because all these investors are scrambling out of stocks, out of housing. Then eventually they need to scramble also out of the dollar. And this is where I feel like crypto is going to have such a big play. Because the more people talk about a global financial crisis, the more the crypto community can say Bitcoin was designed for a situation like this. So yeah, I actually view this as long-term bullish. And I'll just kind of conclude everything in the end of this video as well. So make sure you stick to the end. Now, obviously with videos like this, I really take a lot of effort and time to produce it. So if you guys are watching this, please do take the time to smash up that like button down below. And of course, share with your friends as well. And an ending note as well. Obviously, I'm not a financial advisor. This is not financial advice. Now, on a rare one-in-time event, we actually have a presentation to explain what is happening. What's happening with Evergrande? Why is it causing this global fear? And why is it causing crypto crisis or crypto prices rather to go down? So first, let's start off with Evergrande. Evergrande has $300 billion of debt. That is a lot of money they owe people. They owe banks. They owe other businesses. And in fact, they have property that they haven't finished building in China. So yeah, it's not a good situation. Now, the biggest fear is that Evergrande can't pay their debt. They might go bankrupt. And if that is the case, then a lot of people won't be getting the money that they are rightfully owed. So this is kind of the biggest problem. This is the fear that's causing the markets right now is that it's not isolated to Evergrande, right? It's more about the market-wide stock market disaster that could potentially happen here. As Evergrande can't pay off their debt, other companies will also potentially fall as well. Because if they have direct dealings with Evergrande, well, got some bad news. If it goes bankrupt, that bad stuff will happen. So again, this is the worst-case scenario. So just putting it out there, guys. This is the worst-case scenario. This is what's causing the major fear. And there's a lot of other considerations too. So what makes the situation a little bit worse is that Evergrande is a real estate company. It deals with Chinese property and Chinese real estate sector. So now the bigger fear, the bigger elephant in the room is could there be a real estate disaster? So for those of you who don't know about the Chinese real estate market, it is pretty hyped up, to say the least. So here's a few charts that I found. And it's pretty much the perfect definition of up-only. It's been growing quite aggressively in the past two decades. There's a lot of skeptics, critics calling it a massive bubble. And, well, it never really got the chance to release steam. The Chinese government has been consistently trying to kind of curb the growth of the real estate market to kind of let off some steam. But the biggest issue here is that, well, that hasn't happened yet. So this is the reason why there's so much fear of a housing bubble or a housing market collapse in China. It's because, well, there's just so many new homes being built. The price of homes have been just steadily rising up and up and up. And a lot of people view it as a matter of time. And if this is the camel, if this is a black swan event, then this might be the straw that breaks the camel's back. So now to finish the argument, this is why fear is spreading. We have a potential real estate disaster and potentially even a larger picture, a damaged Chinese economy. After all, real estate is 15 to 20% off the Chinese GDP, depending on how you measure it. And this could cause a global economic disaster as well. Now, if you want more on this, you look no more than YouTube, because YouTube has just been packed with videos about Evergrande, about this potential economic collapse. There's just so much fear spreading on both YouTube and mainstream media. It's kind of driving me nuts. So poof, we got the fear out of the way. Let's talk about rational thought for a while and some of the key observations here. So first and foremost, I think this fear is kind of more bigger bite than it really is. There's a lot that hedges on how the Chinese government will deal with this. I mean, if we can see this, the Chinese government can see this too. And there's a huge potential for a massive bailout on the Chinese government end. So if that happens, then it might be a disaster averted. It doesn't really, the problem doesn't really progress beyond Evergrande. And it's kind of isolated in that case. Now let's move on to the thoughts about Bitcoin too, because short term obviously is very, very bearish. As investors and such, as they start to feel fear out of the market, they're going to just pull money out of everything, right? So if they're sensing a crash, investors just kind of pull out, sell off all their assets, their stock, and potentially property. And also this might cause a cascading effect where anyone in a leveraged position, and this happens a lot in the stock trading space, if they're overly leveraged and if they're protected up to 20, 30%, a freak event like this might cause them to be liquidated, causing further sellouts. And obviously why it impacts Bitcoin and short term bearish is because these investors, because they're afraid, because their mentality is of fear right now, they're just blindly selling everything. We've seen the same situation happen when coronavirus hit. Remember when it was first spreading around the world and people got afraid. The first instinct that investors got was to sell. So we saw these massive sell-offs of Bitcoin in both February and March. However, after that, the investors turned very, very bullish on Bitcoin. And this is exactly what I'm watching out for. Because let's face it, at this current point, with so much fear in the market, where are investors going to go, right? No housing, there's a fear there. Stock market, there's a fear right there. And on top of that, US dollar. I mean, global economy, not looking so good. I mean, in terms of what governments can do right now, especially at this point, with interest rates being so low, with so much money already being printed, we're running out of options. And the fear of further inflation is going to really hit. And investors will now start to look at both precious metals and cryptocurrencies. So I actually view this as a situation where investors will eventually start to realize that they have to go somewhere. And this is really positive for Bitcoin. And I just want to remind everyone that during the previous financial crises, Bitcoin was the asset that really blew up. It was the safe haven. It was not just the safe haven, but it was the asset that moved up the most. At the end of the day, the Bitcoin, I mean, if you look at the original Bitcoin white paper, sure, it's a great way for payments. But also, it's expressly designed to counteract failures in the financial system. So in other words, Bitcoin was designed for this. It was made for this. And in many ways, a lot of Bitcoin maximalists will be waiting for this event to happen. At the end of the day, Bitcoin cannot be created out of thin air. There is a limit to the number of Bitcoin. And the mining process is completely dictated by mathematics that are out of the control of politicians. And on top of this, Bitcoin can be transferred around the world. As we see tensions rise, and as we see China versus this war between China versus US, and potential limitations on how we can use currency, Bitcoin becomes the one true global currency. So thinking long term, I really feel super, super bullish right now. So now on to what I'm currently doing in terms of my strategy in this market. First to set things out, I have two kind of distinctly separate strategies. So I have a long term play, which is a dollar cost average strategy. That's strategy number one. And I have a second trading strategy that I kind of trade based on momentum of how this market is changing. The first strategy is very long term. And typically speaking, what I do is I dollar cost average by Bitcoin, and then I just kind of hold it. It's pretty simple. The second one is a lot more aggressive, almost a middle finger there. But now the second one here is a little bit more aggressive. It is all about trying to time the market and trade according to the flow of the market. So let's start with strategy number one, what's happening there. And that is simple dollar cost average. I'm still going forward. Now I made a video yesterday right before the crash. I think you can probably see here if I just dodged my head over here, you can probably see that prices were still a little bit higher than today. And I did enter my dollar cost average. And do I regret buying yesterday as opposed to today? Obviously not. I mean, the whole point of a dollar cost averaging strategy is that I'm not looking for the best price, but I'm looking for to build up a position in those assets. So yes, absolutely. I'm continuing that dollar cost average. In fact, as markets gets cheaper and as the opportunity is better, I'm actually going to increase the amount into dollar cost averaging. Now, another question is on my trading side, am I buying the dip right now? And unfortunately, that is a no at this current point. So I'll just give two reasons why. Now, first reason why is I feel like there could be a potential better timing right now. So the way it works, I feel like is that this is quite a big event, and it will take some time for the investors and for this fear to go out. And it could be the case that that fear could lead or future fear could lead to another major crash in especially a flash crash in cryptocurrencies. So that's what I'm kind of in the watchful mode for. So if that's happening, I don't want to take up some major positions. I don't want to take up leverage positions at this current point of time. Now, second reason is a little bit more personal. I'm in Asia right now, and there's holidays coming up the next few days. So I'm going to be busy and I won't be able to access the computer 24H. You know, again, when I'm going and pursuing a trading strategy, typically speaking, I want to be next to computer the entire time. So in that sense, I do feel like this discount is going on. And what I'm going to do, my response to that is not to directly trade it at this current point, but rather what I'm going to do is I'm going to DCA. So I'm going to increase the amount of dollar cost averaging I'm going to do, and I'm going to increase more funds into DCA account. Cause I feel like long-term, right? If you, if you look at, well, not even long-term, if you look at even the medium term in crypto, we see the months of November and December coming up. And those have been months where Bitcoin really outperforms and guys, that is what's happening. That's my take. Obviously I really want to rush this video out, so I appreciate if you guys have any feedback so I can comment and build on this topic as well. On top of that, we have some upcoming videos about blockchain and also Jemmy's been working really hard on a video about teaching guys how to use blocking. And we're going to start that with a quick swap. So coming up quite a lot of video, quite a lot in the works. If you do want to follow what is going on. So I've been trying to challenge everyone that I see to do three YouTube shorts a day. So this is my box mining shorts channel. It's a short shorts of the shorts. So come check it out. Leave a link down below if you guys are interested in checking out the shorts. Jemmy and Nathan are also doing shorts as well. So yeah, just check them out. I'll leave the links down below. And obviously guys, if you guys enjoy videos like this, I stay up pretty late to make it. So make sure you destroy that like button smash it like how the markets got smashed today. Too soon, too soon. But anyways, guys, click that like button, click subscribe. I'll see you in the next video.