‘We’re projecting probably about a $14,000 bottom’ by November, crypto expert says

BitBoy Crypto Founder Ben Armstrong joins Yahoo Finance Live to discuss the crypto market sell-off and why he thinks it will continue throughout the summer.

Video Transcript

SEANA SMITH: A collapse in crypto prices, Bitcoin now trading just above $ 22,000, off another 5% today, hitting the lowest level that we’ve seen since 2020. And as it stands right now, around $ 200 billion has been wiped off the crypto market just since Saturday. So let’s bring in Ben Armstrong. He is the founder of BitBoy Crypto.

Ben, it’s great to talk to you. Certainly, a lot to digest when we take a look at the recent moves that we’ve seen in crypto. And then, of course, we had the layoff news earlier today, everything that was happening with Celsius and what that could potentially imply about the crypto industry at large. Help us make sense of some of the headlines that we’ve been digesting for the last 48 hours.

BEN ARMSTRONG: Yeah, it’s a lot. I mean, the first, you have to start with just the price drop. And I think it’s important for people to understand, Bitcoin tends to work on a four-year cycle. And we are exactly where we should be according to that cycle. We are right in the thick of a bear market. We said last year, when everybody was over the moon about adoption and so many users and too many people know about crypto now, on my channel, we were very quick to tell people, we will get a bear market. It always happens. The market always gets overheated. And usually when people are saying it’ll never happen, that’s when it happens.

Now when we’re targeting prices, you know, 10,300 is in 85% drawdown. We’ve traditionally seen that in bear markets. The other thing that we’ve not seen yet is we’ve never seen the price go below the previous four-year cycle top, which that would put– $ 20,000 was a cycle top in 2007– or excuse me, 2017. So if the price goes below that, we are in unprecedented territory. But we’re still not down to the 85% number.

You start looking across the crypto landscape, look what happened with Celsius– definitely a turn of events a lot of us did not see coming. But a lot of people were putting out kind of some feelers on social media over the last few weeks that there were some problems with Celsius. I do believe that Celsius is going to eventually honor– as long as they do not get liquidated, you know, they’re going to honor giving everybody their money back. But it is hard to really see a path forward for them developing trust with the user base again, outside of maybe being bought off by maybe FTX or BlockFi or maybe another company.

RACHELLE AKUFFO: But Ben, do you think we’re going to start seeing perhaps a consolidation for some of these platforms, once we’re sort of seeing some of these rumbles of layoffs and contractions? And we’re still sort of awaiting this rebound that a lot of people are still expecting for crypto.

BEN ARMSTRONG: Well, that’s a great question. And I do not think we’re getting a rebound anytime soon. I mean, I want people to understand that. We’re projecting probably about a $ 14,000 bottom at this point. But we do not expect a bottom until November. That’s traditionally where we see this, is in the midterms. Right following the midterms, you have the last drop. Things kind of turn around from there. But looking at the layoffs, I want people to understand, these layoffs are not indicative necessarily of where we’re at in crypto.

If you think about– I used this example on my show earlier. I used to work at the mall when I was a teenager. I sold shoes. People called me Al Bundy. You know, I used to sell shoes. And every Christmastime, the mall would hire over their quota. They would hire seasonal help to come in to work for November and December. Well, the crypto market is no different. The only thing is, the seasons last about two years, two years of a bull market and two years of a bear market.

So a lot of these companies knew they were over hiring and that volume would drop because these people like Brian Armstrong, he knows– Sam Bankman-Fried– they know we eventually go into these bear winters. And so that’s part of their business plan, is to overhire, and then they weed out people when things drop down. So this is not indicative of, like, crypto’s falling apart or anything like that.

But I do think you make an important point when you talk about consolidation, because I do believe we will see consolidation of crypto platforms. I think eventually, we’ll see some consolidation in crypto projects as well, when you have some more niche specialized crypto protocols kind of getting kind of lumped in to maybe a bigger– like VeChain, for instance, the supply chain tracking. I use this example a lot.

They could possibly obtain some other protocols that are very niche than supply chain tracking, and absorb them into their protocols and their platforms. So I think we are going to see a lot of consolidation over the next few years in crypto all across the board.

DAVE BRIGGS: All right, Al Bundy, so the next couple of Fed meetings, as they continue to raise rates, what will be the impact, do you think, on the entire sector?

BEN ARMSTRONG: Well, I definitely do not know if they’ll be able to score four touchdowns in one football game in high school. I do not know if they’ll be able to do that. But I think when you look at the 75 bips that we’re getting added this week, I kind of disagree with one of your guests earlier. He said he thought that that’s already priced in. I think your average person that’s in the market doesn’t know that right now. I think that’s going to hit a lot of people. Those of us that are in this every day, we know about that. And certainly, it contributed to some of the selloffs. But I do think we’ll see some more down action.

But I think what’s really pivotal is when you start looking at the Fed meeting layout for the rest of the year and the aggressive raises and that we’re really trying to get over to maybe to 2.5%, by the end of the year, that sets us up perfect for this timeline we’ve laid out for a bottom at the end of November after the midterms.

The second week of December, we have a Fed meeting. I believe that’s when we get the quantitative easing turned back on, and things start heading the other direction, of course, taking into consideration that, hopefully, the inflation, the year over year inflation will have gone down pretty substantially by the end of the year, hopefully maybe at least 1% or 2% or more.

RACHELLE AKUFFO: But it’s interesting that you mentioned that $ 14,000 that we could potentially see in November, because Yahoo Finance put up a poll asking viewers, are you buying the dip? And 67% said, no, they’re not buying the dip, 32% that they are still buying the dip right now. Do you think people are really taking a wait and see approach, especially in light of some of the news that’s coming out and the slowdown that we’re seeing?

BEN ARMSTRONG: Yeah, buy the dip is a meme. And I think it’s really one of the most harmful phrases in our space, because when you get new people to come in that buy the top, and then all the way down, you’re just, buy the dip, buy the dip, they run out of money. And then when the true good price points come in, they do not have any capital left. So we always suggest to people because we can not give financial advice– and thank God I’m not a financial advisor. I would not want to go that route in school.

But the idea is that we tell people, make sure you diversify and look for scaling points. I think right now is a fine time to start scaling in. We’ve been saying it since Bitcoin bottomed to 25,500 a couple of weeks ago, that it may not be the best price, but it’s a good price. And you should keep money to the sidelines. Maybe put 20% in now, 20% in between 17 and 20, 20% in between 14 and 17, and then keep the rest if we get a much deeper bottom. I think that’s really what people need to be looking at right now, is scaling your entry points.

And I really think, when it comes to the sentiment out there, the reason why people are really taking this wait and see approach is because of the macroeconomic conditions right now. If this were just a standard bear market, like we were in 2018, and we were at kind of similar prices percentage wise, people would maybe be more apt to go back in. But right now, with all of the rate hikes and the turmoil over in Ukraine and Russia and the oil prices, it’s hard for people right now to see an easy path back up.

SEANA SMITH: So, Ben, that’s the retail side of things. Switching gears here and talking about the institutional side of things, because I think when we see a massive drop like we have seen in the price of Bitcoin, maybe institutions are reevaluating how they use or whether they use crypto at this point. What’s your read just on the interest that is still being generated from the institutional involvement in crypto? And I guess, do you think this is enough, the volatility, to scare some of that Wall Street interest away?

BEN ARMSTRONG: Well, there are no bigger scammers in the institutions. That’s what I’ll tell you. They were just putting out articles recently saying, Bitcoin’s going to $ 75,000 to $ 100,000 by the end of the year, our analysts predict. That is BS. Those are outright lies. Those are institutions looking to squeeze people to get back in on opium so they can use them as exit liquidity, similarly to what they did at the end of November when we got a dead cat bounce that basically went too high.

And to see people susceptible to listening to what the institutions are saying right now– take Scott Minerd from Guggenheim Partners. I mean, there’s nobody that lies more, that’s a better reverse indicator than when he comes out. He literally said last year Bitcoin was going to $ 600,000 when I think it was at 40 publicly. And literally, the same day, he sold all his Bitcoin. That’s all public record. The people in charge of these institutions, they are the elites. They want to stay the elites. And they do not like it when the average person can come up.

So they want me to lose. They want you to lose. They want the average retail investor out there to lose. But they understand the long-term implications of where things are going. These are the people that are squeezing things down to the bottom right now. Who do you think is stop loss hunting? Michael Saylor and Celsius. It’s the institutions. They’re the only people with enough money to do it. So from my perspective, you can not take anything that comes out of the mouth of the institutions as straightforward. You can only judge by what they do and never, ever, ever listen to what they say.

DAVE BRIGGS: You really ought to tell us how you feel, man.

BEN ARMSTRONG: That’s the only way I know how to do it.

DAVE BRIGGS: Presumably, all this has had a chilling effect on new projects and startups in the industry. It won’t keep you away, though. Tell us about this project with the Players Lounge and why now–

BEN ARMSTRONG: [INAUDIBLE]

DAVE BRIGGS: –why name, image, and likeness.

BEN ARMSTRONG: Well, it’s perfect timing. I mean, here, at BitBoy Crypto, we say we’re the people’s channel. We love being for the people. And that goes across the board. We’re for the athlete. So we partnered with Players Lounge. 50% of all of the NFT sales from the Players Lounge go directly to the players in NIL deals. People do not understand. NIL, Name, Image, Likeness. This is what allows players now in college to actually monetize their worth as an athlete and as a person, as a student athlete. And we love getting behind this.

We did a drop with the University of Georgia. Go, Dogs. That’s my home team here. And, you know, absolutely went phenomenal. It sold out in 2 and 1/2 hours. We’ve got drops with LSU, Alabama, Auburn, Oklahoma, Texas, you know, Florida, Tennessee, many other coming up. We’re going to have a big party at media day, the SEC media day, that’s going to be coming– I believe it’s in July. So people just need to keep an eye out.

You know, what we’re going to see– and this does not have anything to do with crypto necessarily. This is more Web3. This is more the future of peer-to-peer. When we say Web3, peer-to-peer, things more decentralized, people being able to capitalize on their worth, not waiting on big corporations to tell them how much they’re worth and try to steal their privacy. It’s a new generation that we’re heading to. And we’re happy to lead that charge.

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