I spoke with Cointelegraph earlier this week about my thoughts on the current state of the crypto market. I even shared my price predictions for this cycle. You can see my answers below.
Bull Market
Q1: Do you see any signs of the current bull market slowing down?
A1: No, what’s important to note is the interplay between Bitcoin and alts along with Bitcoin’s dominance. As a function of the total market cap, we will continue to see it rise dramatically. There is no question that huge money is coming into the space, along with institutional announcements, an imminent ETF, the introduction of banks, etc. At a basic level, supply and demand are telling us that “number should go up.”
Alt Season Thoughts
Q2: Will we continue to see this exponential growth that we saw over the past few months?
A2: Yes, I think we are only at the beginning. I could be wrong but the “it’s going to zero” and “it has no intrinsic value” narratives are dead. Bitcoin has killed and crushed those ideas by proving its strength. I think it will become another normal asset in your average investors’ portfolio in the coming years. This means volatility will diminish over time and every sensible investors’ portfolio will be exposed to a small degree.
Q3: Are we officially in an alt season 2.0?
A3: I think it’s been alt season for like 4 months, to some degree it’s been alt season for years, it just depends on which alts are in season. Last summer DeFi projects were pulling 100xs and NFTs the last 6 months have undergone an epic alt season if you will. Looking at dominance as a metric, dominance has only slowly dropped a small amount. If we start to see large amounts of dominance begin to drop, the alt season could potentially become mind-blowing.
Q4: What factors would lead to a severe drop in dominance to create a summer alt season?
A4: A consistent and safe sideways Bitcoin will continue to drop the dominance. If Bitcoin has a 20% move to the upside, alts will suffer on the Bitcoin pair. If you consider alts on their USD pair, they will follow Bitcoin up but probably just underperform. I consider it an alt season when an altcoin can perform Bitcoin. Dominance is a difficult metric because of the number of new projects being introduced to the market that compete with Bitcoin dominance.
Q5: Is it too late to hop on the altcoin bandwagon?
A5: No, not at all. If the entire market goes parabolic, alts will be dragged along by their ear lobe. If you are trying to trade it, you have to time it. Alternatively, if you are a long-term investor which most people should be, and there are altcoins you are interested in, and you want to responsibly dollar cost average into them, I think you will be happy in a year.
XRP Thoughts
Q6: What is your interpretation of XRP’s recent pump over a dollar?
A6: It goes to show how nascent, small, and reactive this market is. It’s my understanding that a judge ruled discovery on the SEC’s documents allowing Ripple to take a closer look at the claims the SEC is making regarding the token being a security. The market reacted, and pundits began to scream the case is over, and XRP is going to be relisted and none of that is the truth. As per usual we get a lot of fake news over a small story, I am not trading it because every time the price rises, we see a tranche of coins being sold by their treasury.
Maybe this is over now that Ripple is under scrutiny. Ripple may be beating Bitcoin in this temporary window but Bitcoin has still outperformed Ripple. As long as the market does well, XRP will probably rise because it got destroyed and what goes down often times comes up.
Q7: Is the fate of XRP determined by the outcome of the lawsuit?
A7: In the short-term yes, it could also destroy interest in trading in the short term. The company is successful and the token is very functional, it works. But if you can’t trade it, it is hard to see its value rise.
Q8: Do you have any short-term price predictions for XRP? How about $10?
A8: I think $10 is stupid, it is certainly possible, but there is no rational reason to be making that guess. The day people start talking about $10 is the time to sell.
Ethereum Thoughts
Q9: Would you agree that Ethereum is leading the market and Bitcoin is trying to catch up?
A9: I love the sentiment, but I don’t think we are the point where anything other than Bitcoin is technically leading the market. With that said, I am more bullish on Ethereum than Bitcoin in terms of price. Investing in Ethereum right now is like investing in the internet in the early 1990s. It’s hyperbolic and the best leading indicator of alts performance.
Q10: What time frame do you see Ethereum outperforming Bitcoin?
A10: It’s been outperforming Bitcoin for a couple of weeks. I have generally dollar cost averaged into Bitcoin the past 5 years, but the past 5 or 6 months I have switched to Ethereum, that’s where my conviction and money are because I see more upside.
Price Predictions
Q11: Are there any coins in the top 10 that particularly stand out to you?
A11: Right now, we are seeing Bitcoin consolidate and large caps do well. Litecoin and BNB both look exceptional, I think they could hit $350 and $600 respectively. There is a lot of bullishness right now around Pancake Swap and Binance Smart Chain, and then of course Ethereum and Litecoin.
Q12: Any price expectations on Bitcoin and Ethereum this year?
A12: I think a $10,000 Ethereum and $100,000 Bitcoin are both possible and reasonable. I called for 10k ETH a few months ago and the hate I received increased my conviction it will hit the target. A 10k ETH is only a 5x from here, which is really not that much in this market. In the short-term, I think $3,600 for Ethereum is what I see based on the chart. For Bitcoin, I can see the cycle top being somewhere in the 200K’s.
There is a classic tale called the Parable of the Ox that we used to determine our prediction. In the tale, a man at a fair is trying to guess the exact weight of an ox to win it and decides to take the average of everyone’s guesses. Humans are terrible individually at guessing but as a group are extremely accurate. So, we researched the top predictions and took an average of them to calculate an average of $235,000. I think if you take an average of all the ludicrous predictions in every direction, that will give us a target on our cycle high.