WHY Crypto’s HORRIBLE WEEK is Actually a really Good Thing
I wanted to record this really quick video because its a little different than my normal talks, but i think important uh. I am not obviously a crypto bull, a perma bull, a bear any of those things, but i am an investor who moved one percent of his net worth to crypto about two, maybe two and a half years ago. So i bring you this information from a standpoint of having real money in the game and not as someone whos been pushing this or that or any of those things. I just want you to know that i think what has transpired in the last week in the crypto market is actually a good. No a great thing. What we have needed in the crypto market is a washout. We needed the pain like we saw at the dot com crisis. So what i want to do for you that maybe not paying attention to this world is talk about whats transpired over the last seven days and then again i want to reiterate: i think what has transpired is a really really good thing long term. I do believe theres a lot more pain to occur, but we are now starting to see the signs of fraud. Leverage stupidity leave the system, which ultimately means more innovation, more focus and more good things. So lets go to monday. Monday monday. There was a company called celsius network who had basically gotten people to pledge or stake, or whatever the right word is.
12 billion dollars in coins basically token took their coins from here, put it in there and they were paid interest. People have told me interest between 18 and 20 percent. That is crazy. There is no wonder why so many people chose to do that. Well folks, what happened on monday, or actually happened on saturday and then sunday and was reported on monday, was nothing short of a complete bank run. What happened? Is they lent long and borrowed short, which is a bad business model in banking they paid crazy rates, and now they are insolvent, theyve already hired bankruptcy. Lawyers. If you are unfortunately stuck in this, you are likely going to get pennies on the dollar. If anything, it is very unfortunate, but that crack after lunas catastrophe started rippling through the system and again all of these are unfortunate, but all of the and all of these are real pain, but all of these had to happen. The crypto market got too inflated two full two half baked with stories and 20 interest in a world of rising rates, where you cant, borrow wasnt didnt work long term tuesday, we had coinbase, who, again for a long time was arrogant, was a long time saying. Hey were gon na, do what we want to do, even though the market was punishing their stocks, they came out and finally said we are laying off one fifth or twenty percent of our employees. We are canceling. Job offers right, thats on top of gemiini and crypto.
com, and all of these others washing out um employees write layoffs. Again, these have to happen. There was not enough innovation going on so now we are going to start to see concentration as we go forward again. A good sign, a good use of capital. You have to manage your burn rate, wednesday rumors of microstrategys margin call started to swirl again it had been reported. I dont know months ago that on 200 – and i dont know 50 million dollar loan, they had margin it. I dont know bitcoin at 23k or something like that 22.5. They obviously have a lot of capital to pledge. But again, when you are looking at taking on the biggest bull in the market and again, i believe macro micro strategies has the largest haul of crypto uh. On the balance sheet of any public company, its not even close well over a hundred thousand coins, you are going to get attention and more and more people were swollen around this. As the price point kept on falling thursday bitcoin the biggest of the biggest cracked 20 000. again one of those numbers that people said wasnt possible again more pain ahead, more leverage squeezed out of the system uh on leverage there was an ethereum. I think it was 80 million dollar leveraged position was taken out on saturday. Again, leverage is leaving the system, then friday, saturday, another large hedge fund. I think its called three arrows was liquidated by um im, drawing a blank on the company block five block five uh washed out their position again on margin.
These are all things that have to happen. On top of that, it is very likely that publicly traded miners, who were at one time rewarded for having coins on their balance sheet will start selling because they have to pay their bills. They have to pay their in their interest on loans at the pay head. Count again, lots of forced selling coming also the public right crypto, just like any other investment, is a confidence game. If you are confident you can put it in, you will buy the dip. You have undoubtedly seen the crypto bros were buying the dip bow bro lets. Go but youre seeing a lot less of that. All of these things have to happen. It is exactly what happened in the dot com crisis. We saw plenty of companies like pets.com, like webvan, raise hundreds of millions of dollars with bad operators and a story wash out and wash out quickly. We are seeing frauds scams pump and dump rug pulls washed out of the system. These are all good things long term. In addition, what we really need – and what is really happening right now – is leverage right frauds going. Leverage is being pulled from the system if you own your coins and youre a long term holder, you dont care whats going on. If you own some of your coins or half your coins or 25 of your coins, and you threw on leverage, you are shark bait, you are one bad weekend, one bad night away from a margin call in complete liquidation own, your st.
If youre committed, youre committed, stop gambling stop speculating and then most importantly, for the crypto market. Just like the dot com era, true innovation will win. Ive always said, i believe in crypto, i believe in blockchain, i believe in the space changing the future. I have no idea who is going to win. I have no idea if a current coin wins or if the winner is a coin that is coming, that hasnt hit the market. Yet i have no clue so. Two and a half years ago, when i took one percent of my net worth and put it in the market, i put 98 of it in the big coins, and then i took two percent talk to a buddy of mine who had at the time eight figures In the space – and i said, give me one flyer: 98: in the two biggest coins, two percent in one total gamble – crap shoot that can go to zero and i havent touched it since i havent, i didnt touch it when it was up 200 percent. I didnt touch it when it was even. I didnt touch it when its down 10 from when i bought doesnt matter. For me its an insurance policy. It is, and has always been an insurance policy. This is not speculation. This is not chasing get rich, quick uh, which many people are. I do believe that the future is bright with less and we will see true innovation.
We will see that blockchain is a game changer, so im excited for whats coming. I do think the last week, while horrific and painful if you got caught in it, certainly if you got a margin called and leveraged out that sucks learn the lesson. I am ecstatic that fraud is leaving im, ecstatic that rug pulls and pumping up or leaving im. Sorry, if you got caught learned the lesson i am most excited for, where this goes, i do think blockchain and by happenstance the umbrella of crypto will change many many industries, including real estate. I believe the current existing title and escrow process is ripe for this. In the next 5, 10 15 20 years, who knows but theres this, it just makes sense to me logically, so i just wanted to give you if youre in this space and youre getting murdered or slaughtered or whatever the right word is. I feel you i think whats going to happen is youll, build a smaller foundation and well get innovation from here. Not selling didnt sell here, didnt sell there its just an insurance policy. I look forward to whats happening uh again, i think a cleansing process is a net positive, so have fun. Folks, we will do the daily financial news in a couple of minutes.