The bitcoin price cratered this weekend, but the bull market is just getting started. That’s the assessment of crypto blogger Willy Woo, who says the downturn is merely a transitional phase before things start heating up again.
Woo, a partner at cryptocurrency hedge fund Adaptive Capital, says the latest market drop is laying the foundation for a sustained rally. “Fomo complete, stage set,” he tweeted.
“Stage 1 of the bull market is completing. Once we bottom, stage 2 begins, promising the long sustainable bull drive that takes us through all of 2020 (if BTC continues its personality). Stage 1 was trader-driven dominance squeezing us up and driving fomo.”
Woo was following up to a prior tweet, where he claimed that institutional investors have already started investing in crypto.
The analyst believes this trend — coupled with the recent market volatility — is setting the stage for another bitcoin bull run.
Like other bitcoin bulls, Woo is undeterred by the latest erratic crypto price movements. Why? Because progress is never linear.
In business — as in life — things rarely move up (or down) in a constant trajectory. Crypto believers understand this.
Willy Woo echoed the exuberance of venture capitalist Chamath Palihapitiya, a self-proclaimed “disciple” of billionaire Warren Buffett, a noted bitcoin hater.
As CCN.com reported, Palihapitiya says bitcoin is the best financial hedge you can have against an uncertain world economy.
This is why Palihapitiya believes you should buy some bitcoin: to protect yourself in case of a global economic downturn.
“It’s the single best hedge against the traditional financial infrastructure. This is the schmuck insurance you have under your mattress.”
Palihapitiya, a former senior executive at Facebook, is the founder of Social Capital, a private equity fund based in California.
In 2013, Palihapitiya and his Silicon Valley tech pals once owned 5% of the entire float of bitcoin. He first bought bitcoin years ago, when its price hovered at $100.
The venture capitalist joins a growing chorus of crypto evangelists who say that despite bitcoin’s volatility, it’s not a bad idea to invest a little in it.
Palihapitiya’s optimistic outlook on crypto is a stark contrast to his hero Warren Buffett, who blasted bitcoin as “rat poison squared.”
Buffett has also repeatedly torched all cryptocurrencies as worthless, speculative gambling. Moreover, he predicts that crypto will eventually come to a bad end.
Dimitrios Koutmos, an assistant finance professor at Worcester Polytechnic Institute, agrees with Warren Buffett. Koutmos says bitcoin is a horrible hedge against a volatile stock market or an uncertain economy.
In his report “Market Risk and Bitcoin Returns,” Koutmos sounded the alarm for the irrationally exuberant cryptocurrency investor.
Koutmos says his research indicates that the bitcoin price is not as independent of external influences such as stock market movements and geopolitical uncertainty as crypto evangelists claim.
Therefore, Koutmos advises against buying crypto as a hedge against a potential recession as the global economy shows signs of slowing down.
Last modified: July 13, 2020 1:36 PM UTC