What is my biggest problem with cryptocurrency? What is the biggest problem? I have of crypto right now. Uh ive been thinking about this question quite a lot recently uh and not just because were in a drop not because were in the bear market. Uh and its a problem that i think is so solvable, i dont think its a problem. We should run from the hills from, i think its just worth pointing out worth isolating, so you can get an understanding of what that problem is and understanding how to react. To that problem, its not mining, its, not energy consumption right, its, not criminal activity going on in the bitcoin blockchain. Oh no, its none of that right, its not that crazy stuff that youll hear kind of splattered across the media. 24. 7.. My biggest problem with cryptocurrency right now is the correlation to the spf 500 right, thats part of it, but, more importantly, my biggest problem with crypto its going to sound ridiculous, but hear me out, is the volatility, the abundance of traders and the lack of long term Holders right now, thats hypocritical, coming from a trader, and i know what it sounds like and its going to take uh you guys watching the whole video for this to make sense right because it doesnt make sense on the surface its like. Well, you said biggest problem and now youve just said four different problems that doesnt make sense right. You have to watch the whole video to understand, but essentially the only reason bitcoins dropping so fast right now.

The only reason that bitcoin is dropping so quickly with the s p, 500 right. The reason its dropping in accordance with the s p 500 is because its dominated well, first of all, its a risk on asset, second of all, its dominated by traders dominated by traders. Right youll hear on twitter, you hit on your, you know: youtube everyones, holding bitcoin. Everyone holds bitcoin long term hold how many people do. I can actually hunt long term hold bitcoin right even out of the people who say they long term here old bitcoin, you can tell, i can tell you right now. They do not long term hold bitcoin and you can look at the on chain data. You can look at the on chain metrics and try to prove me wrong there and you know: go ahead, yeah. Of course, the on chain data is going to say theres more long term holders now than there was before that doesnt mean theres, many of them that doesnt mean what theyre holding is actually substantially position size right. The you know, the fact of the matter is the vast majority of people in cryptocurrency, whether they like to admit it or not, are at least swing traders and possibly even consider they wouldnt be considered scale traders but theyre at least swing trades, which means theyre trading And theyre buying and selling uh within an interval of one year, all right, thats right thats. What i would define as swing trading long term holding in my opinion, is anything over one year now people are going to tell you different things about that, but i would say the vast majority of people in crypto are swing traders.

Why? Because the bull market only lasts one year right and how does the price go down? You know how? How would the price go down in a bear market after a one year, bull market, if no ones selling right its because its got dominated by swing traders? By definition, right, everyones selling after buying within a year before theyre swing, traders uh, and so you know what what does that mean? What does it mean when people sell well? Obviously, people gon na sell bitcoins a risk on asset right. The the s p 500 is going down. Theyre gon na sell their bitcoin make sense nothing wrong with that, but it means that the markets dominated by traders, otherwise the price wouldnt drop 80 because 80 of bitcoin being sold right by traders theyre, not long term holders selling their bags. If youre, a long term holder you shouldnt be selling regardless right, theyre swing, traders uh, whether they like to be you know, macro swing trading or whatever theyre swing, traders and so trading causes that volatility right. The only reason the price moves is because people are buying and selling okay and trading causes that volatility uh and you could say well thats normal volatility is normal. You know look at any risk on asset. Well, we have to take a step back. We have to think well what is bitcoin actually trying to be right? Is it trying to be a traders haven, no, its, not no bitcoins trying to be like gold, all right, bitcoins trying to be like a currency, but most likely its trying to be like gold? Its called digital gold for a reason right, thats from satoshi nakamoto himself: digital gold, okay, thats.

What bitcoin is trying to be? What is gold doing during this recession? Right, whats gold doing while the s p 500 is going down? Well, golds not dropping yeah, its dropping slightly, but golds, not crashing 80, and you could say well thats because of the bigger market cap, no its actually because gold isnt dominated by traders right gold is dominated by long term investors, and so, if crypto, if bitcoin specifically, Was what it is meant to be? It wouldnt be dropping this much during the recession, regardless of the market cap right. Gold essentially, is a good example of how bitcoins meant to move in terms of price action, not yet its not adopted. Yet, of course, it makes sense for it to have volatility, but what im trying to get at is that the volatility bitcoin has inevitably is a snowball effect. Okay, what happens when theres volatility in the market? When you see a market with very, very high volatility, it encourages people who are hunting that volatility to go to that market and use that market to harness the volatility. And it ends in an endless kind of domino effect in which your your market is dominated by people who are hunting volatility and hence its an endless cycle in which you never get out of the volatility. The price actually never settles down, except on a long period of time, right now, thats. The problem of cryptocurrency is that its a very, very volatile market and its dominated by people who want to trade and harness that volatility to make a bunch of money, which means its main objective, which is to be digital gold, is going to be very, very hard To achieve, because not many people are actually sitting here, treating it like its digital gold, theyre, treating it like its something theyre flipping on ebay, theres, nothing wrong with that.

I do that. I do that. Okay, theres nothing wrong with it, but thats the biggest problem, because i think that you know a lot of people would say: well, these 80 corrections theyre all you know, thats thats good. If we want a volatile market youre going to have volatile to the upside of all time downside well, i would argue that bitcoin doesnt need to be volatile. Why? Because all coins are always going to be volatile, doesnt matter. What bitcoins doing? I think the best case scenario for cryptocurrency is bitcoin. Stagnant, doesnt, move, barely moves right and then traders go into those low, capitalization all coins. Okay, that would be the best case scenario for crypto, because the traders have a place to go. Theyre trading all coins and the long term holders stay in bitcoin right. That would be the ideal scenario, and that would be what bitcoins intended to do. That would be what the crypto space would be intended to do right, but instead what weve got is bitcoin dominated by traders and since bitcoins dominated by traders, the more volatile all coins are even more dominated by traders, and so every time bitcoin goes down. The the all coins that are more volatile than bitcoin go absolutely berserk, and you just end up with this fiesta in which youre you know its its actually slowing down the growth of cryptocurrency to a certain extent, because its scary right people who dont know ta outsiders, People who dont understand crypto theyre, not really looking at that volatility in the positive light.

Okay, unless theyre, you know, got a little uh intuition for gambling theyre, not looking at it in a positive light. Theyre looking at it, wow thats, scary, youre, gon na lose all your money right, thats prohibiting growth in the crypto space. So the only way the crypto space can grow at this point is via it growing right and when it grows, it reduces the volatility, and you can see the problem. I have with that right. That sentence doesnt make sense, but its true. The only way the crypto space can grow is via its growing right and so its already happening, obviously its growing slowly on a cyclical basis, its growing slowly, slowly slowly, but at this point my problem of crypto is the fact that i think im listing out a Few here, but my problem with crypto at this point is the fact that crypto is a household name now i think everyone knows about crypto, even if you go to a third world country to a certain extent or developing country uh, most people in those countries actually Know crypto theyve heard the word crypto now they might not understand what crypto is and thats the same thing with first world countries right most people might not understand what it is, but theyve heard it theyve heard about it and theyve likely looked into it. At least a little bit, which means the target audience, has likely already gone to crypto. Okay, that doesnt mean its not going to grow anymore.

It just means this is an example. I like to use my in my market psychology, video on my vip group, chat its like well. If everyone already knows about something – and everyone is already telling you to buy something – dont buy it because youre, probably too late right, im, not saying youre too late with bitcoin. But the point is the growth potential you know per year lets say is severely diminished because the price moves up by new people getting in and buying or people with more people with money in the market, putting more money in the market right. So so, if, if everyone already knows about it, everyones already bought it, everyone whos targeted everyone crypto, you know everyone who crypto interest has already bought into it. Youre gon na have less new people coming into the market, because youve got a less. You know your target audience has already been reached to a certain extent and i think thats the case of crypto right now and i think thats why crypto might actually see a very slow period of growth uh. You know especially cycle to cycle. I mean we already seen the returns on cryptocurrency severely, diminish right. We went from going to going from, you know less than a hundred dollars uh to about a thousand dollars and then the next like we went from a thousand dollars to twenty thousand dollars and then in this cycle, weve gone from twenty thousand to just sixty thousand.

I mean we only did like a 3x whats going to be the next cycle. If the 3x was last cycle right, like a 2x, you know were going to double in valuation. You know at some point that diminishing returns is going to get very, very intense and people need to take a step back and think well whats the problem here and i think that problem thats, the problem ive outlined there right the problem with crypto the number one Problem with crypto its taking me a long long way to get to this point, but the number one problem with crypto right now is that it cant really grow anymore without growing sounds ridiculous. Sounds like an idiot sounds like i dont make sense. You know. Laugh me. All you want, but it makes perfect sense to me right: cant really grow without growing and that doesnt mean its not going to grow. But it means its going to be severely slow and severely painful and theres going to be a severe amount of backlash on the way, even still right. So thanks for watching hope you enjoyed uh the reason why im posting this video today. The reason why im posting this video in this kind of direct format is because, when this video actually uploads ill be on a little trip on a little holiday for three days, uh going away with my partner – and so i wont be on youtube for three days. I thought id make a quick little video just talking about this.

I think its an interesting topic. I know my points here, havent exactly been very defined and you know thats fine. I dont have a problem with that uh. You know i dont need to have the the perfect pinpoint arguments set out. I think you guys understand what im saying um so yeah ill catch you guys in about two or three days.

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