‘Prepare for more pain’… but positive thesis for Bitcoin and Ethereum hasn’t changed: Collective Shift
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It’s weeks like this in crypto where the Stealers Wheel classic Stuck in the Middle with You comes to mind. We’re trying to make some sense of it all… but we can see it makes no sense at all…
And because of that we reached out for a brief chat with Ben Simpson, CEO of the Tassie-founded crypto-education platform Collective Shift, and one of his colleagues, Senior Research Analyst Nicholas Sciberras, for some added expert perspective.
Hey both… what a start to the week in crypto, eh? Are you still over in the US, Ben?
It’s pretty crazy. Nah, back in Australia right now but heading to NYC this week.
How about that there Celsius? Do you think rumours of its insolvency have any basis?
They really are legitimate concerns, yeah. The problem is, Celsius has money locked in ETH that it can’t withdraw. So they’re facing a big liquidity issue.
It seems that they might have staked too much of their assets and not left enough room to redeem now.
Not good. If it really does become the next major crypto domino to fall, would crypto’s reputation be well and truly in the toilet for a while?
It’d definitely be a big hit if they go under – a lot of retail users have money locked up in Celsius. And they’d also be a lot of the same people who would have been hurt by the Terra implosion, too.
So unfortunately I think all of that has been, and will be, hurtful for the space in the short-medium term.
It’s not just Celsius that’s causing the latest pencil-snapping, phone-smashing price action, though, is it. Rising inflation and the US Federal Reserve is also in the mix. What’s your hot take on that market-sapping angle?
Yeah, the US Federal Reserve’s “transitory inflation” has proven not to be the case. The Fed is having to raise rates but what that does is it threatens their economy and increases the likelihood of recession.
It seems they are almost in a no-win situation with this. This image from the analyst Lyn Alden pretty much sums it up!
Where do you see the crypto market heading for the rest of this year then?
Well because crypto and Bitcoin are so tied to traditional finance right now, it appears we should probably prepare for more pain… It could, however, also just be a bit of a struggle sideways.
Any tips for getting through the bear market as a crypto investor? DCAing? What’s Collective Shift’s approach?
Yeah, accumulation over a set period could be the name of the game for BTC and ETH. We still remain bullish on Ethereum, as ETH will reduce its net issuance when it moves to proof of stake.
Although Ethereum is not independent from BTC, so it still appears to be going down with BTC, one positive thing to watch for is a possible ETH supply-shock next year.
Consider moving your crypto to cold storage.
Crypto bear markets usually end via a U-shape recovery, not a V-shape recovery. Don’t try to pick bottoms.
Be patient. This bear market could last a while.
Focus on BTC & ETH https://t.co/MGPCZ4P1mF
— Ben Simpson (@bensimpsonau) June 14, 2022
So you’re bullish on Ethereum still, that’s good to hear. Bitcoin, too, right?
Yeah, the thesis really hasn’t changed for BTC or ETH at all and both are good value right now, in my opinion. Also, there are still plenty of positive developments happening place for both – for example Ethereum’s Merge, as mentioned, and news such as Jack Dorsey’s “Web5” announcement from late last week.
What about altcoins? Time to stack up on “hot, cheap cryptos”?
Nope. We’re staying away from alts. When we’re talking about more pain in the near future, altcoins are going to bear the brunt of that.
At Stockhead, we tell it like it is. While Collective Shift is a Stockhead advertiser, it didn’t sponsor this article.