Bitcoin Bottoms At $11,000, Cryptos Will Still Outperform Stocks In Coming Recession – Hex Founder Richard Heart
Bitcoin is down 65 percent from its all-time high of $68,990. In June, it briefly fell below $18,000, suggesting a 75 percent drop from its all-time high.
Appearing on Kitco News last year, Hex founder Richard Heart predicted an 85 percent drop in the price of Bitcoin.
“At my last appearance here, I said that Bitcoin went down to $10K,” he said. “So far Bitcoin has fallen 75 percent in total, 10 percent shy of my target of 85 percent.”
Heart accused institutions with large stakes in Bitcoin such as Celsius, MicroStrategy and Three Arrows Capital of taking leveraged positions in the cryptocurrency, leading to a bubble.
“Michael Saylor took leverage and he’s down, I think, 30 percent on the Bitcoin stack,” Heart said. “The government in El Salvador is down, ARKK investments are down. Everyone is broken, except me. I called the top of the deck.”
Heart spoke with David Lin, anchor and producer at Kitco News.
https://www.youtube.com/watch?v=/vfE7UFDceqI
Bitcoin in a recession
The National Bureau of Economic Research has not officially declared that the United States is in a recession. However, Thursday’s data from the Commerce Department shows that the US economy has experienced two quarters of negative GDP growth, the standard definition of a recession.
Recession risk is potentially heightened as the Federal Reserve raises interest rates.
Heart said Bitcoin’s outlook is bearish during a recession.
“Bitcoin is directly correlated with the stock market,” he explained. “When interest rates rise, stocks go down. When stocks go down, Bitcoin goes down. When Bitcoin goes down, most other cryptocurrencies go down too.”
However, Heart cautioned that relative prices do matter.
“If the investment you have falls 20 percent, but all the things you want to buy fall 20 percent, you broke even,” he confirmed. “So, all that matters is the ratio of what you have to the things you want to buy… I don’t care about GDP growth or ‘not growth.’ How does that affect me? I care about Ferrari prices , Rolex prices. I don’t know what a gallon of milk costs. I’m too rich to care anymore.”
Bitcoin Risk
In a recent podcast, Heart called Bitcoin whales “centralized villains.” He used Grayscale’s Bitcoin trust as an example.
“Grayscale has 3 percent of all Bitcoin,” he said. “This is a centralized counterparty that can choose not to pay you.”
He added that exchanges that trade in Bitcoin are vulnerable to hacking.
“The giant hacks come from stupid people who don’t know why crypto was invented, and put their coins in someone else’s wallet,” he explained.
Most crypto exchanges do not give their customers custody of their own wallets, and simply hold the customer’s coins in trust. This facilitates liquidity, but can put customers’ accounts at risk, as exchanges are prone to hacks and fraud.
“Almost every single exchange has been hacked at some point,” Heart said.
To find out Heart’s thoughts on Hex’s performance, and whether Bitcoin is an NSA creation, watch the video above.
Follow David Lin on Twitter: @davidlin_TV (
Follow Kitco News on Twitter: @KitcoNewsNOW (
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