“We are probably estimating a bottom of $ 14,000” by November, says the crypto expert
BitBoy Crypto founder Ben Armstrong joins Yahoo Finance Live to discuss the sale of the crypto market and why he thinks it will continue over the summer.
Video transcription
SEANA SMITH: A collapse in crypto prices, Bitcoin is now trading just over $ 22,000, up another 5% today, hitting the lowest level we have seen since 2020. And as it looks right now, around $ 200 billion has been wiped out of the crypto market right now since. Saturday. So let’s bring in Ben Armstrong. He is the founder of BitBoy Crypto.
Ben, it’s great to talk to you. Absolutely a lot to digest when we take a look at the latest moves we have seen in crypto. And then of course we had the layoff news earlier today, everything that happened with Celsius and what it could potentially mean for the crypto industry in general. Help us understand some of the headlines we’ve digested in the last 48 hours.
BEN ARMSTRONG: Yes, there is a lot. I mean, the first one, you have to start with just the price drop. And I think it’s important for people to understand, Bitcoin tends to work over a four-year cycle. And we are exactly where we need to be according to that cycle. We are in the middle of a bear market. We said last year, when everyone was over the moon about adoption and so many users and too many people know about crypto now, on my channel, we were very quick to tell people that we want a bear market. It always happens. The market is always overheated. And usually when people say it will never happen, that’s when it happens.
When we now target prices, you know, 10,300 is in 85% discount. We have traditionally seen it in bear markets. The other thing we have not seen yet is that we have never seen the price go below the previous four-year cycle peak, which would have given – $ 20,000 was a cycle peak in 2007 – or excuse me, 2017. So if the price goes below that, we in unique territory. But we are still not down to 85%.
You begin to look across the crypto landscape, see what happened to Celsius – definitely a turn many of us did not see coming. But many people have in recent weeks posted a kind of feeling on social media that there were some problems with Celsius. I think Celsius will eventually be honored – as long as they are not liquidated, you know, they will be honored to give all the money back. But it is difficult to really see a way forward for them to develop trust in the user base again, other than perhaps being acquired by perhaps FTX or BlockFi or perhaps another company.
RACHELLE AKUFFO: But Ben, do you think we’re going to start seeing maybe a consolidation for some of these platforms, when we kind of see some of these rumble of layoffs and contractions? And we are still waiting for this upswing that many are still expecting for crypto.
BEN ARMSTRONG: Well, that’s a great question. And I do not think we will get a boost right away. I mean, I want people to understand that. We are probably estimating a bottom of $ 14,000 at this point. But we do not expect a bottom until November. It is traditional where we see this, meanwhile. Right after midway you have the last drop. Things turn in a way from there. But when I look at the layoffs, I want people to understand, these layoffs are not necessarily an indication of where we are in crypto.
If you think about it – I used this example on my show before. I used to work at the mall when I was a teenager. I sold shoes. People called me Al Bundy. You know, I used to sell shoes. And every Christmas season, the mall would hire over their quota. They would hire seasonal help to get to work in November and December. Well, the crypto market is no different. The only thing is that the seasons last for about two years, two years with a beef market and two years with a bear market.
So many of these companies knew they were over hiring and that the volume would drop because these people like Brian Armstrong, he knows– Sam Bankman-Fried– they know we’re finally going into these bear winters. And so it’s part of their business plan, is to sublet, and then they weed people out when things fall apart. So this is not a sign that crypto is falling apart or anything like that.
But I think you’re making an important point when it comes to consolidation, because I think we’ll see consolidation of cryptocurrencies. I think in the end, we will see some consolidation in crypto projects as well, when you have some more niche specialized crypto protocols that in a way are lumped into perhaps a larger one – like VeChain, for example, supply chain tracking. I use this example a lot.
They could possibly get some other protocols that are very niche than supply chain tracking, and absorb them into their protocols and platforms. So I think we’ll see a lot of consolidation over the next few years in crypto across the board.
DAVE BRIGGS: All right, Al Bundy, so the next couple of Fed meetings, as they continue to raise interest rates, what do you think will affect the entire sector?
BEN ARMSTRONG: Well, I definitely do not know if they can score four touchdowns in a high school football game. I do not know if they can do it. But I think when you look at the 75 bips we’ll get added this week, I kind of disagree with one of your guests earlier. He said he thought it was already priced in. I think the average person in the market does not know it right now. I think it’s going to affect a lot of people. Those of us who are in this every day, we know about it. And it certainly contributed to some of the sales. But I think we’ll see more downturns.
But I think what’s really crucial is when you start looking at the Fed meeting schedule for the rest of the year and the aggressive increases, and that we’re really trying to get over to maybe 2.5% by the end of the year. sets us up perfectly for this timeline we have laid out for a bottom in late November after midway.
The second week of December we have a Fed meeting. I think that’s when we get the quantitative easing turned on again, and things start to go the other way, of course, considering that hopefully inflation, year-on-year inflation will have gone down quite significantly towards the end of the year, hopefully at least 1% or 2% or more.
RACHELLE AKUFFO: But it’s interesting that you mentioned $ 14,000 that we could potentially see in November, because Yahoo Finance put up a poll where you asked viewers if you buy dip? And 67% said, no, they are not buying dip, 32% that they are still buying dip right now. Do you think people really take a wait-and-see approach, especially in light of some of the news coming out and the downturn we are seeing?
BEN ARMSTRONG: Yes, buying dip is a meme. And I think that’s really one of the most damaging phrases in our room, because when you get new people to buy the top, and then all the way down, you’re just, buy dip, buy dip, they run out of money. And when the really good price points come in, they have no capital left. So we always suggest to people because we can not give financial advice – and thank God I’m not a financial advisor. I did not want to go that way at school.
But the idea is that we tell people, make sure you diversify and look for scaling points. I think right now is a great time to start scaling in. We have been saying since Bitcoin reached the bottom of 25,500 a couple of weeks ago, that it may not be the best price, but it is a good price. And you should keep money on the sidelines. Maybe add 20% now, 20% between 17 and 20, 20% between 14 and 17, and then keep the rest if we get a much deeper bottom. I think that really what people need to look at right now is to scale your entry points.
And I really think, when it comes to sentiment out there, the reason people really take this wait-and-see approach is because of the macroeconomic conditions right now. If this was just a standard bear market, as we were in 2018, and we had about the same prices as a percentage, people might be more likely to go in again. But right now, with all the interest rate hikes and unrest in Ukraine and Russia and oil prices, it is difficult for people right now to see an easy way back up.
SEANA SMITH: So, Ben, it’s the retail business. Swaps give here and talk about the institutional side of things, because I think when we see a massive drop that we have seen in the price of Bitcoin, maybe institutions are reconsidering how they use or whether they use crypto at this point. What do you read just about the interest that is still generated from the institutional involvement in crypto? And I guess, do you think this is enough, the volatility, to scare away some of the Wall Street interest?
BEN ARMSTRONG: Well, there are no major scammers in the institutions. That’s what I’ll tell you. They just published articles that recently said that Bitcoin will reach $ 75,000 to $ 100,000 by the end of the year, our analysts predict. It’s BS. These are outright lies. These are institutions that want to pressure people to get into opium again, so that they can use them as starting liquidity, in the same way as they did at the end of November when we had a dead cat bounce that basically went too high.
And to see people who are receptive to listening to what the institutions are saying right now – take Scott Minerd from Guggenheim Partners. I mean, no one lies anymore, it’s a better reverse indicator than when he comes out. He literally said last year that Bitcoin came to $ 600,000 when I think it was at 40 public. And literally, the same day he sold all his Bitcoin. It’s all public record. Those who are responsible for these institutions, they are the elites. They want to remain the elite. And they do not like it when the average person can come up.
So they want me to lose. They want you to lose. They want the average retail investor out there to lose. But they understand the long-term implications of where things are going. These are the people who are pushing things to the bottom right now. Who do you think is stop loss hunting? Michael Saylor and Celsius. These are the institutions. They are the only ones who have enough money to do so. So from my perspective, you can not take anything that comes out of the mouths of the institutions as easy. You can just judge by what they do and never, never, never listen to what they say.
DAVE BRIGGS: You really should tell us how you are, man.
BEN ARMSTRONG: That’s the only way I know how to do it.
DAVE BRIGGS: Presumably, all of this has had a cooling effect on new projects and startups in the industry. However, it will not keep you away. Tell us about this project with Players Lounge and why now–
BEN ARMSTRONG: [INAUDIBLE]
DAVE BRIGGS: –why name, image and similarity.
BEN ARMSTRONG: Well, that’s perfect timing. I mean, here, at BitBoy Crypto, we say we’re the people’s channel. We love being for the people. And it goes across the board. We are for the athlete. So we partnered with Players Lounge. 50% of all NFT sales from Players Lounge go directly to players in NIL agreements. People do not understand. NIL, name, image, similarity. This is what allows players now in college to actually make money on the value as an athlete and as a person, as a student athlete. And we love to stand behind this.
We took a trip with the University of Georgia. Go, dogs. It’s my home team here. And you know, went absolutely phenomenal. It sold out in 2 and 1/2 hours. We have falls with LSU, Alabama, Auburn, Oklahoma, Texas, you know, Florida, Tennessee, and many others to come. We’re having a big party on media day, SEC media day, coming – I think it’s in July. So people just have to keep an eye out.
You know, what we’re going to see – and this does not necessarily have anything to do with crypto. This is more Web3. This is more the future of peer-to-peer. When we say Web3, peer-to-peer, things more decentralized, people can leverage their values, not wait for big companies to tell them how much they are worth and try to steal their privacy. It is a new generation we are on our way to. And we are happy to lead that charge.
