Ultimately, crypto has a major fraud problem and it seems as if it’s popping up all over the place.
- The BTC/USD tried to rally during the day on Wednesday but continues to see plenty of sellers just above the push at lower.
- At this point, the market is struggling to sustain any type of positive momentum, which is not a huge surprise considering the way it has behaved over the last year or 2.
- Ultimately, crypto has a major fraud problem and it seems as if it’s popping up all over the place.
After the collapse of FTX, we are starting to see other exchanges and lending platforms possibly go into bankruptcy. Genesis is on the verge of bankruptcy, and Gemini now has halted withdrawals. Nobody likes putting money into an exchange where you can’t get it out, and although the argument is always to put your holdings in cold storage, the reality is that this does nothing to solidify any trust in the ecosystem whatsoever. Granted, Bitcoin has functioned as promised, but at this point, it seems like Bitcoin is a solution looking for a problem. 12 years later and we still don’t really even know what Bitcoin is supposed to be.
Bitcoin to Continue Dropping
At one point, it was digital gold. Before then, it was a store of value. It’s even been called an inflation hedge at times. The only thing that it has been proven to be as volatile. This type of volatility where you can lose 70% in a year does not make a case for it being money either. After all, you have to assume that nobody wants to take payments and something that could destroy itself in a few months. How can you possibly value anything, when the value in the money has yet to prove itself?
I do believe that Bitcoin is going to continue dropping, perhaps down to the $12,000 level underneath. We might even go below there. I might start to nibble on the idea of going long Bitcoin somewhere in that general vicinity, but I would expect that to be more of a long-term investment than any type of trade. I would not be surprised to see Bitcoin go dead again for another couple of years. There is almost nothing out there that’s going to lift Bitcoin to this point, with perhaps the exception of the Federal Reserve suddenly pivoting and cutting interest rates quite drastically. Even then, the damage done to crypto in this last year by fraudsters has been absolutely catastrophic. Fading rallies continue to be the best trade.