Bullish or Bearish? Decentralized or Centralized?
For the past few weeks, we have seen the volatility of the market, and the crypto world has joined in a unprecedentedly debate over being bearish or bullish. Yet, the market fails to offer any insights, by sending a blurred signal of a unpredictable $Bitcoin price. With those seemingly dominant views expressing pessimistic and bearish, I would argue we are still well positioned in a bounce-back and bullish trajectory.
First, we have tested a steadfast support of the $Bitcoin price in the range of 28K to 30K. We have a substantial correction in the past three months from a record high price of over 64K to as low as around 28K. Yet, this short-term bear trend largely resembles what the market went through in the mid 2013 and 2017. Well, there is not a definitive answer as whether this history chart may recapitulate in coming months; however, this information surely and sufficiently boost investors’ confidence over $Bitcoin in particularly and the entire crypto market in general.
Credit given to ASH_WSB (https://t.me/AshWSB)
Second, regulations seem to crash down cryptocurrencies, and we will fall into a bearish turmoil? The majority of crypto investors have blamed China fud for recent plummeting of $Bitcoin price, but we should be crystally clear about a fact: regulations are for the long-term prosperity of the crypto market, not demolishing it. Regulations mean less money-laundry activities overwhelming exchanges that will definitely wash out vicious people who manipulates dirty cashes. With these regulation efforts, $Bitcoin is being endorsement by sovereignties. El Salvador’s adoption of bitcoin as legal tender is a wake-up call, and other countries may follow up any time.
Third, centralized exchanges are being scrutinized by monetary authorities over the world. While Okex and Huobi global have stepped up regulatory efforts in response of heightened supervision from Chinese government, several countries seem to raise red flags to Binance, apparently the largest exchange in the world. Binance is progressively responding to these regulations by seeking licenses or clarifying its stance in the UK, Singapore, and Cayman Islands (to name a few). However, one spokesperson from Binance did mention that it is operated “in a decentralized manner”. Okay, decentralization. This term once again pops up amid this uncertain period. In my humble opinion, decentralization does not mean any entity can escape regulations from a specific authority and it should be regulated via coordinated efforts involving different ambits and parties. A critical takeaway is how decentralization models our financial system and it plays out in the medium to long terms. Decentralization is not an end, but an entry to a unseen financial model.
Another big news is about NFT, fully spelled out as non-fungible tokens. NFT has been the highlight of attention over the past year, and yet its influence is intensified rather than diminishing. Binance announced an centralized marketplace where investors trade NFT drops such as digital art works, videos, music clips, among others. According to Binance NFT (@TheBinanceNFT), “Andy Warhol’s Three Self-Portraits #NFT just sold for $2,800,000 BUSD — Congratulations to the lucky owner of this piece of art history !”. This deal offers the world a refreshing insight regarding how artist may showcase their works in a distinct and innovative manner.
We have also seen tremendous use cases of decentralized exchanges incorporating NFT and swap functions. Binance Smart Chain and Polygon network (a layer 2 side net to Ethereum main net) both witness a substantially increasing number of project bringing about NFT trading and gaming.
Decentralization + NFT
Decentralization and NFT seems to find a best fit to each other, and this model has proved to be successful by the above mentioned use cases. However, to the best knowledge of this author, existing applications fail to explicitly stress how this synbiosis may retain and grow the values of both the decentralized exchange and NFTs traded on its platform. With my search over those different similar projects, I do find one interpreting how this store of value can be accomplished through a DeFi-NFT value model based on the symbiotic paradigm, proposed by KSwap Finance that is undergoing test on Okex test net. Interested authors may check out this article (https://kswap-finance.medium.com/new-norm-a-defi-nft-value-model-based-on-the-symbiotic-paradigm-1dca234cd97b) for a better understanding.
An illustration of the value model (https://kswap-finance.medium.com/new-norm-a-defi-nft-value-model-based-on-the-symbiotic-paradigm-1dca234cd97b)
Recent market “disturbance” is annoying to speculative investors and FOMO enthusiasts. From a different lens, it helps to calm down the over-heated market, and provides an opportunity of contemplation. Developers, crypto coaches, and investors now have the time to rethink and adjust strategies. We all want a sustainable and healthy investment and financial system, don’t we?