There is blood in the streets of blockchain and I won’t be surprised if there is more.
I suspect that it will get worse before it gets better. This whole thing started out with a consolidation and an uncharacteristically low volatility in crypto.
The question was whether it was going to break up or break down. For those of us looking solely at the macro picture, the involvement of institutions and the potential for an ETF made us believe things were going to break for the better.
In the meantime, the technical guys, the guys who just look at the charts, were calling it the other way. Tyler Jenks, who was on this show just a couple of weeks ago called this sell-off. But he also believes it’s going down towards $1000 before we are out of the bear market.
Maybe he’s right. For better or worse, we shall see. The interesting thing I’ve noticed is that a lot of these guys who called this sell-off and still see it heading south are, overall, very bullish on bitcoin. Tyler thinks after the sell-off it will head up into mid-six figure territory.
In other words, what we are seeing here is a very psychological event that really has no fundamental reason. Sure there was the bitcoin cash hard fork and the threat from Faketoshi about dumping one million bitcoin but that shouldn’t drive billions out of the market should it?
It’s all emotion and automation at this point. A lot of people program stop losses to lock in their profits so when the price starts drifting down, their bitcoin automatically gets sold off. You saw that a lot around $6000. Below that is the abyss. Very few people planned for it so the price is in free fall.
It’s important in times like this to understand, though, that this is not the first time bitcoin and crypto have been pronounced dead. It’s happened multiple times before. This time, there is institutional infrastructure built for this thing to succeed in the long run so the likelihood of “death” is really very small in my estimation.
Furthermore, underlying all of this volatility is a new technology that will have seismic effects on the world. If you believe that, you may still believe that bitcoin prices will be over $100,000 per coin over the next five years. I am in that camp.
If that’s the case, does it matter if you bought in at $6500 or $3500? Either way, you would do quite well. I know it’s hard to think rationally when your brain tells you to run away but that is what separates good investors from the bad ones.
Warren Buffett said, “Be fearful when others are greedy and be greedy when others are fearful.” There is a lot of fear out there right now so, again, it might be time to get greedy pretty soon.
That said, if you don’t want the hassles of dealing with wallets and trading platforms, there is a way to just buy the market when you think it’s bottomed out or stabilized.
It’s through a company called Bitwise Management. This week on Consensus Network, I interview HunterHorsely, cofounder and CEO of bitwise.
If you’re thinking about taking advantage of this crash but don’t know where to start, don’t miss this episode.
By the way, it was recorded before this crash so never mind the talk about the stability of the markets!
Previously Product Manager on monetization at Facebook and Instagram. Received his BS in Economics from the Wharton School of the University of Pennsylvania.
Hunter Horsley’s background
Big institutes getting into cryptocurrency in 2018
What’s holding back the investors
What’s the cost if I DON’T invest
Bitcoin vs everything else
Hunter’s typical investors