Hey Redpill Readers!
Today’s newsletter covers the BTC price correction. If the BTC price drops to the $30k range, should it make you worried? A big no… but we’ll talk about that later.
We’ll also talk about a billionaire’s take on BTC, new price predictions, Biden’s pick for SEC Chair – and much more. So, let’s get to the details.
BTC DROPS TO 30K RANGE BUT RECOVERS FAST
After hitting the $42k all time high on January 8, the BTC price fell about 28%, just as we predicted it would. It sits at the $35k range now (with much more upside).
Reasons for the drop? Here’s what you need to know.
It’s retail-driven, says Nexo Co-Founder and CEO Antoni Trenchev. Sell-offs by retail buyers occurred as soon as the crypto topped $40k across exchanges. “Profit-taking once Bitcoin passed $40,000 triggered small investors who are, understandably, more prone to panic (and excitement) and resort to selling faster,” he said. Are you buying? Or are you selling? It’s your call.
We’re also dealing with an overbought market... according to Asset Manager Arca’s Chief Investment Officer Jeff Dorman. Institutional and retail investments have been getting on the BTC market (for good reason) as early as last year. And what happens with an overbought market? They inevitably lead to dumps by investors who want to take profit as soon as the price peaks.
Just a pullback before Bitcoin reaches $200,000, says this analyst. We’re on the same page. It’s not a matter of IF, it’s a matter of WHEN. On-chain analyst, Willy Woo, is spot on. He was also an early investor in Bitcoin and bought his first one in 2013. But brace yourself for more volatility.
Should you be worried? Not at all. Bitcoin is ripe for a quick correction.
Analysts share the same outlook as us. Like who? Well...
BitRiver’s chief commercial officer Dmitrii Ushakov says that the BTC drop “should not seem unusual to anybody who has been following the space since the 2017 boom.” And we totally agree.
Scott Minerd, who is the global chief investment officer at investment giant Guggenheim Partners, also weighed on this in a tweet: “Bitcoin's parabolic rise is unsustainable in the near term. Vulnerable to a setback. The target technical upside of $35,000 has been exceeded. Time to take some money off the table.”
Despite the fall: Bitcoin whales are buying the dip. And institutional investors are unworried. What are we doing? Still stacking Satoshis.
Quick details: The recent crypto pullback did not stop a few wealthy investors from accumulating more BTC. Data shows an increase in crypto wallet addresses of whales amid the 20% collapse of BTC price on Monday.
The truth is, there’s a loss of faith in institutions. And Bitcoin (BTC) is a sign of the loss of faith in the institutions of the fiat world.
Right now, investors remain unfazed and bullish on the leading crypto. Like who? Well, for one, there’s SkyBridge Capital’s Founder Anthony Scaramucci.
And with Biden’s big stimulus coming, we expect the bull run to resume very soon.
ETH SUPPLY SHORTAGE – SO HODL ON
Ethereum (ETH) is rising just shortly after it weathered the impact of Bitcoin’s drop. Reason? Supply shortage.
The breakdown: Data from CryptoQuant shows that the supply of ETH across centralized exchanges is down to 8.1 million. Alex Saunders of Nuggets News first noted in a tweet that “exchanges will run out of ETH in 10 days at current rate.” Saunders suggests that 20% of the ETH supply may be wiped out from the platforms. Similar data indicating low ETH supply can be gleaned from Glassnode.
A new all time high for ETH is just around the corner.
Again, it’s the law of supply and demand. Traders are flooding Ethereum with large buys but there’s little supply left. Sure sounds like a launch pad for an ETH moonshot price.
So, if you have some ETH in your portfolio, keep the faith and hodl on.
BILLIONAIRE BITCOIN SKEPTIC IS TURNING INTO A BITCOIN BULL – THANKS TO HIS SON
Check this out... Billionaire Howard Marks (who has been a Bitcoin skeptic for a long time), just made a turnaround on Bitcoin and cryptocurrencies.
Backstory: The CEO of the asset management Oaktree Capital called cryptocurrencies unreal in his 2017 note to investors titled “There They Go Again… Again.”
Here’s what he said: “Some businesses accept Bitcoin as payment. Some buyers want to own Ether because it can be used to pay for computing power on the Ethereum network. Some people want to put a little money into [this] profitable phenomena rather than run the risk of missing out. But they’re not real!”
But now, he wrote in his latest memo that thankfully his son “owns a meaningful amount” of Bitcoin while he was a skeptic - back in 2017. The billionaire went on to say he is “striving to learn” about Bitcoin and cryptocurrencies.
Welcome to the crypto club, Howie! And to new subscribers, welcome to the Redpill crypto newsletter. The more folks that take the Redpill of money (Bitcoin), the better.
Billionaire Howard Marks is not the only prominent figure in finance who disliked crypto yet had a change of heart, years later.
Who else, you ask? There’s Jamie Demon, the CEO of JPMorgan Chase & Co who previously called Bitcoin a fraud... and billionaire investor Stanley Druckenmiller. Also, Mark Yusko, the Founder and CEO of Morgan Creek Capital Management.
So, don’t be surprised when you see something negative in the news about Bitcoin and cryptos. It’s what a lot of them do. They spread fear and doubt. And then they go and buy Bitcoin (and other cryptos) behind closed doors.
But the good news: Institutional money still can’t come into our space and scoop up as much Bitcoin as they’d like. There are on-ramp issues. And regulation isn’t clearly defined. In short, this is bad for Wall Street. But great for small-time investors. You have the opportunity, right now, to front-run the institutions.
Do it and don’t look back.
SEC LEADERSHIP IS CHANGING…
Gary Gensler is Biden’s pick to head the Securities and Exchange Commission
SEC recap: Reports say that Gary Gensler is expected to be the next Chairman of SEC. The former chair of the Commodity Futures Trading Commission (CFTC) for five years is a professor at MIT teaching blockchain and digital assets.
In other words, he’s a fintech savvy guy (and not a schmuck).
What else you should know? Gensler is bad for Wall Street but good for crypto. Now, why do we say that? Because he enforced the toughest financial reforms on Wall Street during his earlier role at the CFTC. But he’s mostly been supportive of cryptos.
Acting Enforcement Director Marc P. Berger, the head of the division responsible for the Ripple lawsuit and the action against Telegram’s initial coin offering, exits SEC.
Here are the deets: SEC announced in its press release that Berger will end his tenure this January. His departure comes after SEC Chairman Jay Clayton stepped down from his post in December 2020.
Gensler is a man for crypto. Sure, that can change. And we’ll keep you updated if that does. But here are some of his notable sentiments on cryptocurrencies:
He recognizes the potential of blockchain to be a catalyst for change as real… This is what he wrote on his 2019 December article for CoinDesk: “The potential for this technology to be a catalyst for change is real… cryptocurrencies and blockchain technology have already prompted real change and can continue to do so.”
He called Bitcoin a modern form of digital gold… During the Congressional hearing on crypto and blockchain, Gensler remarked, in response to Rep. Collin Peterson questioning what’s behind the cryptocurrency ecosystem, that “There’s really nothing behind gold either… what’s behind it is a cultural norm. For thousands of years we liked gold.”
And he added… “We do it as a store of value, so Bitcoin is a modern form of digital gold. It’s a social construct.”
And he is a popular choice in the crypto industry: Jake Chervinsky, general counsel of Compound, views this Gensler guy in a positive light (for our space). He said in a tweet: “Gary Gensler deeply understands crypto & has strongly supported bitcoin for years. His selection as SEC chair signals a policy shift in favor of a bitcoin ETF.”
Unlike his predecessor Jay Clayton (sorry Jay), Gensler understands how cryptocurrency works and he’s generally into it.
So, what do we expect with the SEC leadership change? Adoption. And a better approach in dealing with us crypto folks. And maybe clarity on regulation, too. Regulation that supports the innovation, instead of crippling it.
But like we said, things can change. He could be a wolf in sheep’s clothing for all we know. Let’s give him a shot and see how Gensler and his leadership plays out.
MORE REDPILL CRYPTO NEWS
$100,000 plus BTC price by August 2021… This is the bullish prediction of Pantera Capital CEO Dan Morehead for BTC. His reason? Mainstream adoption.
Twitter CEO Jack Dorsey shares passion for Bitcoin – and defends his Trump Twitter ban. Censorship (even if it’s your worst enemy) is a bad move. This will lead us, however, into decentralized platforms. Are we living in a movie? Is this scripted? Maybe it was all part of the (decentralized) plan anyways.
BTC market cap overtaken by Wrapped Bitcoin (WBTC)… just for a short while.
In other news… Grayscale completely turned away from XRP. The asset manager will dissolve the XRP Trust. Reason? SEC's Ripple lawsuit.
And let’s not forget this biggie… EU Central Bank President Christine Lagarde calls for global regulations for crypto. She says Bitcoin conducts “funny business” and is “totally reprehensible money laundering activity.” Oh really, Christine? There she goes again… taking on Bitcoin and calling it ‘funny business’ when she cannot even prosecute fiat money launderers. What a joke.
Financial advisors are joining the crypto club, shows a Bitwise published-survey
One single Bitcoin at $34k now buys one Tesla. Crazy numbers, but true. Maybe this should be the new 2021 exchange rate: 1 BTC = 1 Tesla
Citing a possible five or 10-year time horizon, this billionaire venture capitalist said he thinks Bitcoin will reach $200,000 at some point. “The reason is because, everytime you see all of this stuff happening, it just reminds you that our leaders are not trustworthy and reliable,” he told CNBC.
Mark Cuban: Crypto ‘exactly’ like dot-com bubble - expects Bitcoin to survive and thrive like Amazon. In other words? Take the redpill, folks. Keep stacking.
DISCLAIMER: Newsletters published by Redpill Crypto Research reflect the opinions of only the editors who are associated persons of the firm and do not reflect the views of anyone else. They are meant for informational purposes only, are not intended to serve as a recommendation to buy or sell any security in a self-directed account with Coinbase Inc. or any other account, and are not an offer or sale of a security. All investments involve risk and the past performance of a security or financial product does not guarantee future results or returns. Cryptocurrencies and digital assets are speculative and highly volatile, can become illiquid at any time, and are for investors with a high risk tolerance. Investors could lose the entire value of their investment.
Redpill Crypto Research will have no liability whatsoever for any expenses, losses (both direct and indirect) or damages arising from, or in connection with, the use of information in this newsletter. Readers are encouraged to conduct their own research and due diligence, or obtain professional advice, prior to making any investment decision.© 2020 Redpill Crypto Research. All Rights Reserved.