Crypto can be “riskier” than penny stocks, are easily manipulated – Ronald AngSiy
(Kitco News) – Aside from Bitcoin, Ether and a few other cryptocurrencies with high trading volume, investing in crypto is “riskier” than buying penny stocks, according to Ronald AngSiy, COO of CEO.ca, who previously worked as a blockchain expert .
“Any individual can manipulate crypto prices today because of how small the market cap is,” he observed. “When you get to the smaller cryptocurrencies, that’s where it’s significantly riskier than a penny stock for investors.”
He highlighted that Tesla stock has a market cap of $650 billion, while the entire crypto market only has a market cap of $1 trillion, making crypto “easy” to manipulate.
“If you look at the price of a Binance token, versus the price of a Tesla share, you’ll see how small the crypto market is,” he suggested. “It’s hard, in such a small market, to say how what’s happening in the world will directly affect prices today.”
AngSiy spoke with David Lin, anchor and producer at Kitco News.
Bearish Crypto Trends in 2023
AngSiy suggested that there is “more pain ahead for crypto investors” in 2023, as the Federal Reserve continues to raise interest rates.
“How the pain manifests is hard to say exactly, because the crypto market is so small that you can have one or two front-ends to manipulate the price of the entire crypto market,” he said.
He observed that since Bitcoin came into existence in 2008, the crypto market has only experienced a “low interest rate world”, with the Effective Fed Funds Rate (EFFR) never rising above 2.5 percent until 2022. Currently, the EFFR is around 4, 5 percent, and Fed Chairman Jerome Powell has stated that further increases are expected until the Fed reaches a terminal rate of around 5 percent in 2023.
“We’ve never seen it [crypto] in a world of high and rising interest rates, that’s what’s happening right now,” he said. “When you look at low interest rate environments, it’s easier for investors to borrow money, and then take that money and then allocate some of that to crypto… now you see money being withdrawn from risk assets [like crypto] and either allocated to safer assets, or you see risky assets called margin.”
To find out AngSiy’s outlook for Bitcoin and Ether, watch the video above.
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