This expanded the crypto universe: Expert
Well, it looks like fortune doesnt exactly favor, the brave after all, at least for the moment after one of cryptocurrencys most volatile weeks since 2018., so actor matt damon might have to eat his words from this viral ad for crypto.com. This ad first aired in october of last year and when it did, bitcoin was at around 60 thousand dollars. So a thousand worth of bitcoin invested then worth around 481 bucks today and look at all of these headlines this morning. After what happened yesterday, fear and panic dominated the last 24 hours for crypto investors, as the conditions went from bad to absolutely appalling, but after more than 200 billion dollars was erased from crypto markets in a single day, much of it from stable coins. Digital currencies are making a slight bounce back at this hour. We do have bitcoin back above 30 000 holding there ethereum back above 2000 uh. But you know we. We really watched bitcoin plunging the lows of 25 000 yesterday. So, as we continue to watch each of these names, we should mention the tether. The worlds largest stable coin has regained its dollar peg. After more than three billion dollars, worth of tokens were withdrawn following tara usds collapse. So how did digital assets? How did they designed to be stable fuel in a crash pegged to the dollar? How did they end up on the precipice of a crypto winter or a full out ice age? Its not bad for everybody lets bring in off the chain capital president brian dixon off the chain, as a hedge fund that invests in discounted bitcoin and owns equity positions.
In undervalued, digital asset firms such as kraken, all right, brian um, are you saying that a day like yesterday is something you wait for in your business? So in our business, when the markets react like they have in the last couple days, our investable universe actually expands. So its good time for us to find these deeply discounted valuable assets. Okay, so when, when we have a banner that says winter is coming youre looking at it as springtime yeah, this is exactly the time it strives with our strategy with off the chain, because when the markets go into the downtrend like this, we find more sellers that Are forced or motivated willing to take deeper discounts on the assets and that actually allows us to garner these assets in a time like this and be patient, so we can harvest them in the future. When you saw what happened yesterday, explain to our viewers, how you looked at it, particularly through the lens of stable coins, which are supposed to be pegged to the u.s dollar and suddenly, not only did they go below a dollar, it was a run on the bank And a mass liquidation – and, i believe, even with say, for example, luna, which is one of the stable coins for tara. We looked at that and i mean that went to a penny or so and it appeared that 60 billion. I think that was the number or knocked off that system here.
Do you look at that as a purge that shakes out the people who were never really committed in the first place, so its definitely a purge and youre accurate in what you said. So what initially triggered this was when the fed adjusted rates it had impacts on most sectors, including bitcoin and digital assets, and this created a mass sell off, and you know warren buffett used to say that when the tide goes out, you see who is swimming naked And this is exactly what happened and who was swimming naked in crypto was the stable coin. Luna ust, you see this platform failed and its really created a dislocation in the market and, like you noted it was a 60 billion dollar failure from its peak and it was a run on the bank and the value dropped to zero, and it really just became A death spiral and since crypto trades, 24 hours a day, all that stress in the system cleared out in about 24 hours, and so the failure of luna was purged out of the system and now everythings coming back. And this is really one of the benefits of a truly liquid market that trades 24 7.. It allows the failures to fail out naturally, and then it creates a healthy system afterwards well healthy, but but it appears kind of dangerous. Let me push you on this. You know some investors have lost their life savings in the blink of yesterdays eye youtube, star ksi, i dont know if you know that uh youtube star, but they reported losing, i think its a he 2.
8 million dollars after lunas crash. How do you advise your clients? Your investors, who who say, wait a minute: what am i supposed to deal uh? How am i supposed to deal and absorb this and what happened yesterday? Well, the first thing i would tell them is: i would never advise to listen to people pumping crypto on youtube. Thats, never a great idea, um. What i would advise is that what we do with off the chain is, you know, were seeking value, were value managers in the space and so were trying to find unique ways where you can find undervalued assets, and these are the markets where that happens. When you do have downtrends in the market, you have to be careful, crypto is still an evolving nascent technology. Its emerged tremendously over the last decade, but its growing quickly, and there is a lot of value in the networks but theres also a lot of scams out there. So you really have to be careful when youre evaluating these different crypto assets, because theyre really still going through this period of evolution well at 29. 30. 000. Do you think bitcoin is a deal here yeah? Actually, during the sell off, we took a look at the fundamentals of the bitcoin network and it is still very strong. The total hash rate of the mining network continues to grow. The number of bitcoin wallets continues to grow. The utility of the network itself continues to expand, and the number of institutions that are entering the space is growing as well, and so, when we look at the value of the network, the bitcoin models that we use today show that bitcoin should be somewhere around 48 000 up to 180 000, and so when we see it at 30 000, today its a good value and its something that people should be studying.
Brian uh, youre youre, scooping up uh distressed assets, just like buffett would at a time like this. Just a lot of people dont understand the assets at this moment, but, as you say its early in this, of course, incipient stage of this new expanding world brian. Thank you very much.