With the crypto winter becoming more and more difficult for the various players in the industry, they have set out to find the market bottom that will mark the beginning of a change in trend for bitcoin. Hedge fund manager Brian Kelly went through this exercise last Thursday on CNBC during the show Fast Money. In particular, he claimed that the main cryptocurrency in the market was approaching a generational low. Details in the following.
A trough conditioned by three main factors
When asked how long it will take for bitcoin to finally bottom, the fund manager preferred to first look at the scenario that will trigger it. Brian Kelly notably claimed that the catalyst for the arrival of bitcoin’s trough is a combination of three factors. These include in particular the Bitcoin’s Fall to $10,000, Rising Inflation Expectations, and a Central Bank Policy Mistake of the world. He then claimed that we are approaching a generational low.
” I think if you get those three combinations, a final purge of all that bitcoin leverage to $10,000, $15,000, somewhere around that and inflation expectations picking up, which, I think will happen in the next quarter, and we already know that every central bank has already made a policy mistake and will likely continue to do more. This is the perfect scenario for bitcoin to bottom out. So, now you have it. We just have to wait “, did he declare.
Some companies could meet the same fate as Lehman Brothers
Brian Kelly also spoke about the effects of the ongoing bear market and the impact it will have on companies in the cryptosphere. In particular, he expects some of them to go bankrupt. like the investment bank Lehman Brothers during the 2008 crisis. His remarks surely echo the liquidity problems currently facing companies such as Celsius Network, Three Arrows Capital, BlockFi and most recently Voyager Digital.
“We are probably months away from a ‘Lehman moment’, which is to say a sort of final rush. A big company goes bankrupt when you least expect it. We’re probably months away from that because we just don’t know. There’s still a lot of leverage, of collateral pledged against other collateral. This is a big financial crisis for the cryptocurrency world. “, he concluded.
Although he has not explicitly defined when this generational low will appear, Brian Kelly does not seem optimistic on the short-term evolution of the price of bitcoin. JP Morgan analysts disagree and believe that bitcoin’s fall could be short-lived. However, BTC’s break below $19,000 at the start of the day is likely to add to the current sense of fear in the market.
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Luc Jose Adjinacou
Far from having dampened my enthusiasm, an unsuccessful investment in a cryptocurrency in 2017 only increased my enthusiasm. I therefore resolved to study and understand the blockchain and its many uses and to relay with my pen information relating to this ecosystem.
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