Ep19: Hunter Horsley with Bitwise Management on Buying the Market

11/25/18 • 67 min

Consensus Network: Cryptocurrency News & Education

There is blood in the streets of blockchain and I won’t be surprised if there is more.

I suspect that it will get worse before it gets better. This whole thing started out with a consolidation and an uncharacteristically low volatility in crypto.

The question was whether it was going to break up or break down. For those of us looking solely at the macro picture, the involvement of institutions and the potential for an ETF made us believe things were going to break for the better.

In the meantime, the technical guys, the guys who just look at the charts, were calling it the other way. Tyler Jenks, who was on this show just a couple of weeks ago called this sell-off. But he also believes it’s going down towards $1000 before we are out of the bear market.

Maybe he’s right. For better or worse, we shall see. The interesting thing I’ve noticed is that a lot of these guys who called this sell-off and still see it heading south are, overall, very bullish on bitcoin. Tyler thinks after the sell-off it will head up into mid-six figure territory.

In other words, what we are seeing here is a very psychological event that really has no fundamental reason. Sure there was the bitcoin cash hard fork and the threat from Faketoshi about dumping one million bitcoin but that shouldn’t drive billions out of the market should it?

It’s all emotion and automation at this point. A lot of people program stop losses to lock in their profits so when the price starts drifting down, their bitcoin automatically gets sold off. You saw that a lot around $6000. Below that is the abyss. Very few people planned for it so the price is in free fall.

It’s important in times like this to understand, though, that this is not the first time bitcoin and crypto have been pronounced dead. It’s happened multiple times before. This time, there is institutional infrastructure built for this thing to succeed in the long run so the likelihood of “death” is really very small in my estimation.

Furthermore, underlying all of this volatility is a new technology that will have seismic effects on the world. If you believe that, you may still believe that bitcoin prices will be over $100,000 per coin over the next five years. I am in that camp.

If that’s the case, does it matter if you bought in at $6500 or $3500? Either way, you would do quite well. I know it’s hard to think rationally when your brain tells you to run away but that is what separates good investors from the bad ones.

Warren Buffett said, “Be fearful when others are greedy and be greedy when others are fearful.” There is a lot of fear out there right now so, again, it might be time to get greedy pretty soon.

That said, if you don’t want the hassles of dealing with wallets and trading platforms, there is a way to just buy the market when you think it’s bottomed out or stabilized.

It’s through a company called Bitwise Management. This week on Consensus Network, I interview HunterHorsely, cofounder and CEO of bitwise.

If you’re thinking about taking advantage of this crash but don’t know where to start, don’t miss this episode.

By the way, it was recorded before this crash so never mind the talk about the stability of the markets!

Shownotes:

Hunter Horsley’s background
Big institutes getting into cryptocurrency in 2018
What’s holding back the investors
What’s the cost if I DON’T invest
Bitcoin vs everything else
Bitwise
Hunter’s typical investors
Bitwiseinvestments.com

There is blood in the streets of blockchain and I won’t be surprised if there is more.

I suspect that it will get worse before it gets better. This whole thing started out with a consolidation and an uncharacteristically low volatility in crypto.

Warren Buffett said, “Be fearful when others are greedy and be greedy when others are fearful.” There is a lot of fear out there right now so, again, it might be time to get greedy pretty soon.

That said, if you don’t want the hassles of dealing with wallets and trading platforms, there is a way to just buy the market when you think it’s bottomed out or stabilized.

It’s through a company called Bitwise Management. This week on Consensus Network, I interview HunterHorsely, cofounder and CEO of bitwise.

If you’re thinking about taking advantage of this crash but don’t know where to start, don’t miss this episode.

By the way, it was recorded before this crash so never mind the talk about the stability of the markets!

Shownotes:

Hunter Horsley’s background
Big institutes getting into cryptocurrency in 2018
What’s holding back the investors
What’s the cost if I DON’T invest
Bitcoin vs everything else
Bitwise
Hunter’s typical investors
Bitwiseinvestments.com

Previous Episode

Ep18: Institutional Interest in Cryptocurrency with Michael Moro

It used to be that bitcoin was just for quirky libertarian computer scientists but somehow the virus has spread gradually into big money.

How something that was never advertised goes from nothing to over $100 billion market cap in 10 years and ushers in an entirely new digital currency asset class is mind-boggling to me.

So, it is particularly interesting to people who watched it happen. Michael Moro has been involved with bitcoin trading before the infamous Mount Gox hack and has watched it mature to where it is today.

In this episode, he will take us on that journey and use that perspective on the future of institutional interest in cryptocurrency.

Shownotes:

What caused the bitcoin cash fork problem?
hashing power’s effect on price
Michael Moro and Genesis
When did the institutional money come in?
What is Genesis about?
The benefit of over-the-counter trading platforms
The new Genesis Capital: a lending platform
More on Michael Moro
Genesistrading.com
Genesiscap.co

Next Episode

Ep20: Weekly Cryptocurrency News 11/28/18

Consensus Network Weekly Crypto News 11/28/18

Cryptocurrency Market Capitalization: $138 billion

Bitcoin Price (Coinbase): $4196

Bitcoin Upturn or Dead Cat Bounce?

Bitcoin broke through the $4000 level and flirted with $3500. Today, everyone is getting excited because the market is up. In fact, bitcoin is up almost 20 percent since yesterday.

I’m not a trader. I’ve made that very clear in the past so I don’t buy and sell on short-term market movements. However, I am looking for a bottom because my long-term view on bitcoin and blockchain is very bullish. So, I’m eager to buy more when it’s on sale.

Now just because I’m not a trader doesn’t mean I don’t respect the abilities of those who are. Tyler Jenks was on the show a few weeks back when bitcoin was sitting in the mid $6000s and was about as sure as anyone that it was going to plummet in the short term. To be honest, I didn’t believe him until he literally called it the day before on Twitter. It was like watching Babe Ruth point to the rafters and hit it out of the park.

Now Tyler says that this really is short term and, even if it goes back up to $6K, it’s going easily sub $3k before it takes off. Tyler is seriously bearish on bitcoin price but highly bullish on bitcoin’s future so he’s looking to buy in as well. But he thinks we are going lower before we go back up. One of the things I have learned over the years is that it’s not a good thing to be the smartest guy in the room. You want to surround yourself with people who are smarter than you at various different tasks.

Tyler is a technical analyst and can identify good times to buy better than me for sure. So, I’m just going to buy more when Tyler tells me to buy more on his YouTube channel. You should check it out. It’s way over my head but fascinating nonetheless.

So... bitcoin price may be headed south, but don’t let that fool you into this narrative that bitcoin is dead. While this uptick in bitcoin price may be a dead cat bounce, bitcoin has shown over the years that it has at least nine lives.

We’ve talked about the institutional frameworks that are now being built and those are not slowing down. And people are not slowing down their use of bitcoin. Bitcoin transactions have actually reached their highest level since mid-January. In fact, the number of daily transactions on the bitcoin blockchain is approximately the same as Mastercard.

Why is this significant? What gives Bitcoin its value? What gives anything value? Ultimately it’s faith in the system and the bitcoin blockchain is not being utilized any less than it was at $20K bitcoin.

I don’t know when, but I am quite sure a bitcoin bull run will happen again and this time it will include big money institutional investors that will take it to new highs. I truly believe that we are seeing a tremendous transfer of wealth happening from scared retail investors selling to institutional ones who are buying from over the counter platforms like genesis. Individuals are selling and institutions are buying and they are going to make most of the money...like they always do.

SEC Chairman Comments Cast Doubts on ETF Approval

Jay Clayton, chair of the U.S. Securities and Exchange Commission, speaking at Consensus: Invest Conference reiterated previous concerns about the cryptocurrency market’s exposure to market manipulation.

This was one of the reasons cited by the SEC in multiple rejections of ETF applications. Many were optimistic about the CBOE/Van Eck Solid ETF being considered by the SEC, but Clayton suggested he did not think that had yet been accomplished.

Of course, the CBOE application addresses this problem with pegging the eta prices to over-the-counter trading such as Genesis Trading but given the recent events in the cryptocurrency world, I would personally be shocked if the application is in fact approved next year although eventually I think it is inevitable given the interest from institutional and retail investors.

Ohio Accepts Bitcoin for Tax Payments

The Wall Street Journal disclosed on Sunday that Ohio will become the first U.S. state to accept bitcoin for taxes.

The guy behind this is Josh Mandel, the forty-one-year-old State Treasurer of Ohio who wants Ohio to be the national leader in embracing blockchain.

Mandel says he believes in “leveraging technology for the democratization of finance”.

In case you are wondering, Ohio will be using BitPay as a payment processor that will immediately convert bitcoin into US dollars. They do not currently plan on HODLing although that could actually be the smartest they could do given the price of bitcoin right now!