GTR — The State of the World
If you consider yourself bullish on the economy, the state of the market certainly does not look promising. With so many new risks continuously developing on an almost daily basis, it can prove difficult to stay informed about the world around us. Nevertheless, knowledge is our greatest weapon.
Therefore, in the interest of providing some insight and educational content to the community and the space, this week we will take at look at some of the biggest risk factors currently facing us.
While we do not have the time to delve into the minutiae of these issues, a brief overview will still prove beneficial. Consider this a starting point for further study. This will hopefully help us put everything into the proper perspective. Let us take a brief moment to assess the situation as things stand currently.
The State of Play — International
On the international front, the war in Ukraine has begun taking a more serious turn, possibly for the worst. Owing to recent Russian failures on the field of battle becoming strategic and material windfalls for the Ukrainian forces — primarily in the form of captured war materiel — the Russian government has begun considering taking more aggressive and provocative action.
Vladimir Putin, Russia’s head of state, has mentioned the nuclear option publicly already. Such an escalatory threat by Putin lead Biden, the US President, to take a firm public stance, warning Russia against taking such threatening actions. Those out there who fail to take Putin seriously seem to have forgotten something critical. He already ordered the Russian nuclear arsenal to a higher state of readiness back in March. This action would almost certainly draw in other regional actors and, potentially, the rest of Europe and the US.
With the conflict continuing to escalate, it threatens to drag other actors into the fray. More active belligerents will almost certainly push the already teetering world economy into a very serious, very widespread depression. This war has the potential — some would argue the likelihood — of being the final straw that breaks the current neoliberal economic order once and for all. Only time will tell.
The State of Play — The Fed
It seems like just yesterday since the last time Jerome “Papa” Powell graced us with his presence way back in July. With that extended break now officially behind us, along with a riptide of bad economic and international news and data, the market has been waiting to see the extent of Fed rate hawkishness. Other central banks have already hiked rates in advance of the Fed news, with Sweden leading the way by raising their rates by a full percentage.
Many believe that we still have more major rate hikes yet to endure. As of this writing, the Fed has not announced its rate decision yet. The probability of a 75 basis point hike hit 80% leading into the meeting. Even with such a hike, many observers still predict additional similar hikes continuing on as late as the end of the year, and potentially into 2023. The most bearish commentators have even begun to predict no rate relief or Fed pivot until 2024.
At some point, debt will become too expensive for most people and companies to continue using it. For all of the people suggesting Powell should “Volckerize” the economy, others warn of Powell not pivoting soon enough — which, they predict, will actually prove to be the cause of a massive global depression. If people like Michael Burry end up being correct and the market does topple from the knife’s edge, the world economy could grind to a halt.
The reality is, there are no simple answers here. We have no reason to believe Powell wants to drive us off into the economic abyss. That being said, while it seems unlikely that Powell would take such extreme measures, few people doubt his resolve to force inflation back into a reasonable range. The truth is, it all remains to be seen.
The State of Play — the SEC and Gary Gensler
If you stay in this space long enough, undoubtedly you will hear the name Gary Gensler mentioned. Ironically, it is considerably more likely to hear his name spoken these days with some flavor of sneering venom bordering on hatred that the opposite. Ironically enough, many people initially interpreted his appointment to the position of chair of the SEC as a potential boon to the digital asset market. He taught a course on blockchain technology and money at the Massachusetts Institute of Technology (MIT), and most people assumed that familiarity would mean support. Despite the initial hopefulness, his stint at the SEC has made him few friends in the digital asset community.
For almost the entirety of its existence, cryptocurrencies and blockchain projects have managed to enjoy a relatively broad amount of freedom to pursue their endeavors, owing to the relative lack of regulation related to the nascent industry. This freedom, while great for encouraging innovation and progress, unfortunately has left the door open for bad actors who maliciously take advantage of people under an admittedly lax oversight and enforcement regulatory environment.
Enter Mr. Gensler. Between the SEC’s case against Ripple — XRP’s parent company — and his public rhetoric, many people in the market fear the worst. It remains unclear whether Gensler’s rather hawkish public statements regarding cryptocurrencies — and, more worryingly, the SEC’s own behavior against the sector — both presage a much more aggressive and prohibitive set of regulations in the near future. Most fear the worst.
One thing is for sure. Gensler does intend to impose some sort of regulatory regime onto the digital asset market. He is a very smart, very capable man with a reputation for sharp elbows and knowing how to make good use of them in bureaucratic territorial fights. No matter what happens, we must remember that the SEC wields a great deal of power in Washington, DC, and tends to protect the interests of traditional financial interests above all else.
The Straight Dope
As you can see, the current market environment does not really exude strength and stability. To put it succinctly, greater turmoil looms. In light of just the three risk factors discussed above, the market does not appear healthy at all. As the drums of war persist, the deleveraging continues into the foreseeable future, and with the global order looking weatherbeaten and stumbling, anticipating the next big moves is not for the faint of heart.
The truth is, nobody can predict the behavior of the market with any real accuracy or consistency. Trading in these treacherous times can make even the bravest among us cower. Luckily, a successful trader does need be neither a soothsayer nor some mythically courageous hero. To successfully navigate these markets requires a keen mind, a great deal of experience, and a steady constitution for risk. As they say, good judgment comes from experience.
And so it is with our very own Ghost Trader. With more than three decades of successful trading experience, he has provided his skills to some of the most exclusive clientele in the world. It stands as little wonder how GTR has managed to consistently and continuously provide rewards to our holders throughout this incredibly volatile crashing market.
Still, GTR has an eye to the future. Therefore, we have recently welcomed a new addition to our trading team, bringing on new blood in the form of an additional full-time trader. As GTR’s trading pools continue to grow, so will our need for additional expert traders. Bringing on a young trader to work alongside one of the greatest traders in the world affords us the opportunity to ensure that GTR has a long-term succession plan well and firmly in place, long before it becomes necessary.
In coming weeks, we will begin making a bigger deal out of this move. For the moment, our community can rest assured in the knowledge that the team is taking active steps for the future-proofing of the GTR ecosystem.
Please be sure to stay tuned to our social media outlets moving forward for updates and news of the Ghost Trader project. We invite you to check out our official Ghost Trader website, join us either on Telegram or Discord, follow us on Twitter and LinkedIn, and be sure to check out the podcast found here.