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We are now living in a world of weaponised finance

It suddenly became clear to anyone paying attention that this is a fundamental shift with regards to private property rights. What you think you own, the government can seize at a moment’s notice.
April 1, 2022

It suddenly became clear to anyone paying attention that this is a fundamental shift with regards to private property rights. What you think you own, the government can seize at a moment’s notice.

Interestingly, we have all forgotten (or did not know), that two previous government seizures changed the world!

  1. Dec 1922 the Weimar government of Germany seized 10% of all the money in Germany’s banks. This lead to a total mistrust of banks in Germany and caused a major bank run, which resulted in hyperinflation and the collapse of the Weimar Republic, which was the beginning of the ascent of Hitler!(see later post for more detail).
  2. In 1933, in order to restart the American economy, Roosevelt seized all the gold in America’s bank vaults, made laws to outlaw private ownership of gold, and paid $20 an oz (which was the current rate at the time) for the gold, and immediately thereafter revalued gold to $35 an oz!

The original and primary use case for crypto – protected peer-to-peer value transfer – has been put to the test in recent weeks. 

Says Ciaran Ryan of Moneyweb

In recent months, the notion of financial self-sovereignty, ownership and control over one’s financial assets has been brought into the spotlight.

First, the Canadian government decided to seize funds belonging to protesting truckers. Then there was the seizure of Russian central bank assets and the assets of Russian oligarchs in response to Russia’s invasion of Ukraine.

It’s as if cryptos were specifically conceived for just such an event – in fact, they were.

The Bitcoin white paper by Satoshi Nakamoto, Bitcoin’s putative creator, exposes the critical failings of the traditional financial sector that led to the financial crisis of 2008. That crisis birthed Bitcoin, and the many thousands of crypto projects that came after that.

At their core, these are private, decentralised, censorship-resistant mechanisms that help the everyday person transfer wealth across borders without interference.

Cryptos have been in a major pullback since peaking in November 2021. Since then it has been quite clear that “the MAJORS” knew it was time to take control of the Crypto marketplace, and they have pushed the prices down, in order that they could average cheaper prices, and now they have their position, and major interference in banking has caused the sudden reversal in that trend.

In the last two weeks, Bitcoin (BTC) is up nearly 20%, but even that return has been dwarfed by decentralised finance (DeFi) cryptocurrencies such as Aave, Loopring and Compound – whose gains have ranged between 60% and 115%.

What’s causing markets to run? 

“Many risk-on assets such as the Nasdaq, S&P 500 and crypto have bounced back over the last few weeks on the notion that the Russia-Ukraine conflict could be coming to a close, yet it’s hard to tell if this is actually going to come to fruition,” says Brett Hope Robertson, head of investments at crypto platform, Revix.

“There was also some crypto-specific positive news, such as the Luna Foundation announcing their intent to purchase $10 Billion worth of Bitcoin for the Terra treasury. The Luna Foundation plans to use this Bitcoin as collateral to help back its US dollar-pegged stablecoin, TerraUSD (UST) – currently the biggest decentralised stablecoin.”

What’s causing DeFi to run?

There has never been a more attractive time to enter into a decentralised, permissionless and peer-to-peer financial system than now.

“I think there is something more fundamental taking place here. If the last few months have taught us anything, the actions of governments can permanently affect your wealth, domestic currency, and financial liberties,” says Hope Robertson.

“We are currently living in a world of weaponised finance. We’ve seen it in Canada and now with mass financial sanctions worldwide. We’ve seen the US and EU impose sanctions on Russia. We’ve seen Russia push for its gas to be paid in Rubles, and we’ve even seen Saudi Arabia considers the Yuan instead of dollars for Chinese oil sales – in a battle to topple the petro-dollar. It’s a massive game of cat and mouse playing out, and the main tool is not guns – it’s money.”

This is playing directly into crypto’s hands, and especially DeFi .

“DeFi stands for the everyday person who can now get all the functions of a bank in their own personal capacity without the risk of it being frozen, taken away, or used as a wartime tool. The DeFi sector has been overlooked for months and the sector is down roughly 50% over the last year, yet the total value getting locked in these protocols has grown more than 250%. This makes DeFi even more attractive,” says Hope Robertson.

The total value locked in DeFi projects now sits at $228 billion, compared to $72 billion a year ago.

The Revix DeFi Bundle, launched just two weeks ago, is already up 25%.

Here’s what the Revix Bundle looks like:

Source: Revix

What is DeFi?

DeFi is the rapidly growing sector of personal finance products built on blockchains using cryptocurrencies. The beauty of this is that a decentralised financial system has no need for intermediaries and is out of the reach of governments. It replaces the functions of traditional financial institutions like banks (the interest on your savings and the loans you need) with none of the frustrations of using a bank and at a far lower cost.

The DeFi Bundle offers exposure to this potentially game-changing suite of technologies built on smart contracts and blockchain.

The bundle automatically rebalances (meaning it makes slight changes to the weighting and assets in the Bundle) on the 1st of every month. It takes advantage of opportunities available from the most reputable DeFi cryptocurrencies through buying or selling each asset. This dynamic and fully automated approach makes investing effortless, maximising your returns and saving you time.