In a recent CNBC Squawk Box interview, host Dan Murphy asked if “there’s another dip to come” for Cryptocurrency. According to his guest host, TenX co-founder Julian Hosp, the answer is “definitely,” but he thinks this dip will come “in the long run,” not immediately.
Even amidst the holiday season volatility, Hosp is optimistic about Bitcoin going into the new year. When prompted with a question of this volatility and whether it presents a “huge deterrent” for Bitcoin’s use as a currency, Hosp compared the asset more to a store of value rather than a traditional currency.
“I think many people also see, especially in Bitcoin, more of a digital gold,” Hosp responded. He believes that many investors view it as a “safe haven” for value, recognizing that while “this sounds weird if you have these big plunges,” they treat it as a preferable alternative to traditional assets.
“On the other hand, if you compare this to currencies all around the world, Bitcoin might be a better store of value for some time.”
Hosp’s comments follow a holiday week that threw the cryptocurrency market into a bearish nosedive. During the flash crash, Bitcoin fell to under $11,000, down from its all time high of $20,000 just days before. Most of the market follow suit, as crypto’s overall market cap lost $165 billion in a little over 24 hours. Since this correction, the market seems to have found its footing and rebounded.
Hosp believes that the crypto market still has room to grow, but he also believes that it will reach an unsustainable tipping point. When this point comes, he argues that we’ll see the vast majority of these assets die, while a handful of proven ones will rise from the carnage.
“I think just like we had in the dot.com, we’re going to see a huge appreciation of these currencies,” Hosp stated. “But to be dead honest, I think there’s only going to be a small fraction of these currencies that are having a meaningful value and they’re going to be here to stay.”
Still, he believes that this “crypto winter” is “one to two years” out, dispelling fears that the recent correction may have instilled in fledgling investors. When winter does come, we’ll see “a big compression in the market.”
“I don’t think it’s going to be a bubble that’s just going to burst and everyone is going to lose their money, but I think it’s going to be that all the coins and all the assets with very little use or value are going to get sorted out,” he continued.
2018, then, will be a year to weed out the winners from the losers in the winter to come. Smart money, he holds, will “flow into those assets in this cryptocurrency space that really deliver value, have new technology, and are being used by people.”
As such, he cautioned listeners against “just [following] a hype,” urging them to “really think about is this [cryptocurrency] something that’s going to be useful and will be used in the future”
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Last modified: May 20, 2020 9:14 PM UTC