hey, what's up guys bitcoin dropped by 10%
in just last two days in this video i
will explain
why bitcoin was dumped and then i will
answer the question
if this is a good time to buy or sell
cryptocurrencies
bitcoin has registered its biggest price
drop in the last 30 days
as it failed to sustain break about 12,000 for the fourth time during this recent
period after closing about twelve
thousand dollars two days ago
the benchmark crypto reversed its gains
in the last few days
falling below ten thousand eight hundred
dollars that's a
one thousand two hundred dollars or ten
percent lost in just few days
well to be quite frankly i'm not
surprised pre-pandemic bitcoin dropped
by 50
or so in a single day bitcoin is a
volatile beast
and can go up and down in double-digit
percentage
at any given moment
similar happens to ethereum and other
cryptocurrencies
just few days ago ethereum reached its
new local high
of about 488 a coin
it was so close to break 500 level
but it didn't at least not yet right now
ethereum trading slightly below four
hundred
ten thousand dollars a coin that's more
than seventy dollars lost per
coin and if it turned into percentage
that would be
sixteen percent lost yes it dropped more
than bitcoin indeed
but let's not forget the huge
outperformance that ethereum has over
bitcoin
in this year so far
there are two potential reasons for this
cryptocurrency dump
first reason for the declining
cryptocurrency space
is the dollar strength strong dollar
trends in the last few days can decrease
the investor's appetite for
cryptocurrencies
and even precious metals but over a long
time
i have no doubt in my mind the dollar
will decrease as fat printing countless
of papers
and aiming to increase inflation the
dollar softing over five percent could
be a catalyst
for bitcoin to reach 12 000 level once
again
bitcoin has a strong inverse correlation
with u.s dollar in the recent months
as investors feared that the dollar
would further lose its value
they moved to asset classes such as
bitcoin and gold
which have shown they can retain or
appreciate in value
in time of economic uncertainty both
bitcoin and gold had a strong
performance this year
so far yet
there is another and one direct reason
why bitcoin dropped today
two bitcoin transactions from mad gox
called wallet occurred early this
morning
there were two transactions sent to
another address of the total value
equals to
824 bitcoins
which is worth around 76.7 million
dollars at this time
it does not mean that they sold 8214 btc
but if they do the price may dump even
lower now let's take a look at the
famous bitcoin bull
mike novogratz that isn't so bullish on
bitcoin and other cryptocurrencies
in the short term let's take a look at
this video
let's start with this environment right
now uh which
last time you were with us we talked
about the low rate environment how it's
pushing a lot of people into different
assets but
um what has it meant do you think in
terms of the viewpoints
on cryptocurrencies so listen you know
crypto like any uh any of the other
speculative assets has benefited
immensely from
a perception of zero interest rates
forever and
central banks just jamming liquidity in
like they're trying to feed a
foreground duck you know you're you're
you're jamming the food into the
into the duck and um and so we've seen a
a nice move in the bitcoin price we've
seen a a
stellar move in the ethereum price
that's based around
this burgeoning new space in crypto
called decentralized finance
and what you're seeing in d5 which is
really
interesting is really reminiscent of
what you're seeing in tesla
just a speculative frenzy there are new
projects that are doing really cool
things
but they're getting such a surge of
liquidity so fast
uh it's changing at a speed i've never
seen in markets
uh there was a new project called sushi
that was only launched five days ago
and it's over a billion and a half
dollar market cap in five days
and so that worries me some you know
it's while it's early in d5 to see
speculative frenzy like that
i mean i think about tesla today right
tesla's a stock that's up 600
on the year that's trading at over a
thousand times earnings
uh was up 13 yesterday
after being up 70 because of a split
and they announced they're going to sell
five you know billion dollars worth of
stock
and the market wants to trade up you
know that's the power of this frenzy
we're in right now
uh it's it's irrational exuberance you
can call it what you will
i'm a little worried that we're gonna
have a big correction in a lot of risk
assets soon
um i don't think it's a correction that
lasts for that long
because the liquidity machine is not
being turned off
but i think we're gonna go through a
series of these bubbles and
it feels close to being at peak bubble
right now
well there's there's a lot to unpack in
what you said there mike
let me start just with the digital asset
part of things
because a lot of people are just
starting to get their head around
bitcoin even though there's been a very
long dialogue taking place on that
cryptocurrency for many years but you
looted the fact that
you know you're seeing a lot of digital
coins very quickly
uh created and well received in the
market in fact our
our partners at bloomberg just put out a
story about hundreds of coins
being created and they they referenced a
few others like pork chop and spaghetti
and
whale it sounds like you say that that
caution's the key word with some
of these new the these new coins what
what's your ultimate takeaway for
investors on
these new names these new coins that are
coming to market
you know do your work have fun
be careful uh listen i i lived through
and profited through the 2017
crypto bubble and this feels somewhat
reminiscent to it
uh there it was the icos back then you
know a new ico every day
and the herd would would swim to that
ico and jam the price up and there'd be
a frenzy of liquidity and price
and then it would collapse and they'd
move on to the next thing and it feels a
little bit like that i
i think defy is going to be around
longer
i think that you are building
infrastructure you know compound might
exist in 20 years and
we might trade interest rates not a jp
morgan but on compound or
some decentralized uh baby but this is
still
we're a sandbox right now and it's a
sandbox that's getting liquidity like
it's an
adult industry and so it's it's it's be
very careful
um what's interesting is the bitcoin the
new bitcoin buyer
uh is an institutional buyer it's a high
net worth buyer they're coming in
methodically and slowly
uh and they're not stopping and so
that's keeping the bitcoin price up
a lot of the traditional crypto people
right are selling their bitcoin
uh buying the sexier sexier objects
and so in this move of
this kind of mania which we're seeing in
decentralized finance
it's pushing ethereum price up because
it's built on the ethereum network
and other protocols it's probably
putting a little head a little weight on
bitcoin
which tells you how powerful bitcoin is
that even with that selling pressure
it's still going up based on the macro
story
listen cryptocurrency is here for good
and so i couldn't say that in 2017 2018
uh that sentence comes with an
exclamation point starting this year
right we we crossed the rubicon bitcoin
is not going away
uh the ethereum project is not going
away
it's got critical mass uh and you're
gonna continue to see
innovation after innovation i would
still tell you that while
bitcoin is a finished product as a store
of value as a digital gold
the rest of crypto you need to put into
the broad venture bucket
it's still a sandbox there are
experimentation there
there's spectacularly cool innovations
happening
but we're really really early i love all
the new access points
i love all the new participants uh
people understanding how it works
uh and i am positive in 10 years the
ecosystem around cryptocurrencies
bitcoin ethereum the whole space
block shades is going to be multiple
times
bigger than it is today i agreed with
mike novograt
about defy projects new projects
receiving lots of liquidity
so fast just because of their dump names
such as
yam which already filled pork chops
spaghetti
even sushi list can go on and on
and no this is not a restaurant menu
these are what's so called
defy projects what i think about this
project
is pump and dump scheme at initial
launch this project
is being pumped and soon after that dump
follows
and moving on to the next one it creates
no value
no utility so i would recommend staying
away from this part of cryptocurrency
market
in the end of the day if you play with
the fire eventually
you will get wrecked it is very similar
what happened in 2017 bull market run
where icos was a new hot potato and
attracted
lots of hype around many ico's coins
could increase by thousand percent
but disappear in no time so i am not
recommending to get into these
new quote-unquote dfi projects but
could this market salov provide with a
new opportunity to buy some bitcoin in
ethereum
personally i think this price is still a
bit so high
and i would not be a buyer if bitcoin
would drop to like
8 000 or so then i would be buying more
bitcoin
and if ethereum would drop to around 200
i would also be
buying eth but in meanwhile i would not
be buying anything
if bitcoin ethereum price grows from
here then it's great
my portfolio would increase respectively
and if cryptocurrency will drop from
here
then it's not that terrible news it will
give me an opportunity to buy more
leading cryptocurrencies
it's like flipping a coin hats i win
sale
i do not lose much and still win in the
long run
if you're playing with those new
projects hats you lose
and sale you get wrecked i think it's
obvious
which game is better let me know what do
you guys think about this recent bitcoin
dump
and why bitcoin dump in the first place
leave your thoughts in the comment
section below
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