Bitcoin (BTC), Like Gold in 2008, Will “Flash Dump” But “Moon Afterwards” Says Expert Crypto Analyst

Omar Faridi
  • Bitcoin (BTC) will “have a bull run” after its value drops significantly due to a “flash dump”, says experienced crypto analyst Willy Woo.
  • Woo had accurately predicted on May 25th that BTC’s price would drop below $6,000.

Willy Woo, an experienced cryptocurrency analyst, had accurately predicted via Twitter in May that Bitcoin (BTC) would drop below the $6,000 mark before it would exhibit any signs of recovery.

Woo also noted in late May that BTC may not sustain the $7,000 price level. The crypto researcher remarked:

I think we are gonna go to $5500-5700 next, I can’t see $7000 holding. Most likely we’ll balance a bit, then we’ll slide through. Long time-frames here, looking into June for rough timing of this to play out at a best guess.

“$5000s Is A Very Strong Support Band”

Woo had further predicted that BTC’s price would probably not dip below $5,000 within the same period. His comments on bitcoin’s price movements 

“I don’t necessarily think we’ll fall through the 5000s… sure it’s a possibility but it doesn’t have to. It’s not a repeat, it’s not Mt Gox and Willybot pushing up price with faked orders, we aren’t detoxing from a scam bubble. Technically $5000s is a very strong support band.”

On June 29th, BTC had fallen to its lowest value we’ve seen this year when it was trading at around $5,800-$5,900, according to data from CryptoCompare. Then about three weeks after hitting its low point, bitcoin’s price surged past $8,000 on July 24th.

Now though, it appears that this was fairly short-term bullish momentum given that BTC is currently trading well below the $8,000 mark at only $7,671.65 at the time of this writing. Notably this significant drop in bitcoin’s price took place in just 48 hours.

“Flash Dump” Ahead For BTC, But “Moon Afterwards”

Given current trends in the crypto market, Woo has now made some more predictions. He stated on August 1st that Bitcoin will likely drop further because of a “flash dump”, but “then moon afterwards, just like Gold in WFC [Wall Street Financial Crisis] 2008. Flight to safety: everything else sells off to USD, then used to unwind leveraged positions, then afterwards havens like Gold and BTC have a bull run.”

Woo also remarked that moving forward, bitcoin’s value would depend on whether institutional investors make substantial investments in the cryptocurrency market. The Forbes contributor said, “Probably also contingent on how many institutional players are in the BTC market over that period. Normal retail HODLers won’t tend to have large leveraged positions to unwind from, apart from maybe mortgages.”

Crypto Trading Tips From Willy Woo

Woo offered some advice on crypto trading as well:

When in bear, stay in USD as a base currency, then short (and long with extra care). When in bull stay in BTC and do vice versa.”

Notably, the veteran crypto investor often uses the NVT signal/ratio to predict bitcoin’s future performance.

The Standard NVT ratio is calculated by dividing Network Valuation by the Transactional Value on a blockchain network, and then “smoothed using a moving average”, according to Woo, who introduced it last year: "The moving average [is then applied] … to the volatile Transactions component only without smoothing the already stable Network Valuation component.”

Legendary Value Investor Calls Bitcoin an 'Insurance Policy' Against Inflation

Siamak Masnavi

In a recent episode of the FutureProof podcast, legendary American value investor William H. Miller III—who is the Founder, Chairman, and Chief Investment Officer of investment firm Miller Value Partners, as well as the portfolio manager of mutual funds "Opportunity Equity" and "Income Strategy"—talked about Bitcoin.

Before starting Miller Value Partners, Bill Miller and Ernie Kiehne founded Legg Mason Capital Management, and they worked as portfolio managers of the Legg Mason Capital Management Value Trust from its inception in 1982.

It is important to point out that Miller is not your average fund manager.

As CNBC noted back in June 2018, Miller's 15-year streak (through 2005) of beating the is S&P 500 is still a benchmark no active manager can touch."

With that introduction out of the way, let's take a closer look at what Miller said about Bitcoin in this episode of the FutureProof podcast, where Miller had a discussion—moderated by Jonathan Braunstein—with Mike Novogratz, Founder and CEO of crypto-focused merchant bank Galaxy Digital, that aimed to answer the question "When is the Right Time to Buy Into Bitcoin?".

Braunstein started the conversation by asking Miller when he first got into Bitcoin.

Miller replied:

"I got involved in Bitcoin... around 2013. I think it was trading at around 200 bucks or so, which is where I started buying it, and then it ran up—and going on memory here—to around $1100 or $1200 and then... it collapsed all the way back down to $200 again in 2014

"And I began to buy it again, and so I bought it up to probably around 500 bucks... my average cost is I think around $300."

The moderator then wanted to know why Miller felt those were the right times to buy Bitcoin.

Miller answered:

"Well, Bitcoin has been, as you may know, an extraordinary performer. We call it "digital gold". We're on cryptocurrencies basically ever since it came out, and so I came to it relatively late compared to when it first came out...

"But my thought then was it was a really interesting technological experiment and because the nature of what it was trying to do, it had many different ways to win and my view was that if it became a payment system, if it became a non-correlated asset, any of those things, much less all of them, would lead to a very dramatic move in the the underlying price.

"And that was that was also helped along by the fact that it's limited to 21 million bitcoins, it's decentralized, and it's not able to be tampered with or debased.

"So my view was the distribution there was a huge right skew and with anything you can only lose a hundred percent of what you invested...

"I could make a hundred times my money. I could make a thousand times, maybe more than that, and I can only lose, you know, a hundred percent.

"So, I did it as a technological experiment, and to give me a giving a rooting interest in it and I still haven't sold any Bitcoin."

Then, after Novogratz had explained why he believed that now was the right time for investors place a bet on Bitcoin, Miller was asked if this indded was the right time to buy Bitcoin.

Miller said:

"Absolutely... where I come from in this is that for most assets that you that you buy, especially that your FAs [financial advisors] are putting in client accounts, the more they go up in price, the less value there is to be extracted out of it, and the riskier it becomes.

"Bitcoin in is in the unusual position of being almost the exact opposite of that. It was very risky when it was trading at a dollar or five dollars or ten dollars.

"I think it could have easily disappeared, but at the current price in the high nine thousands, with the all the venture money that has gone into it, with what Mike said [about] the institutional interest, with some of the big-named players he talked about... getting interested, I think it's reached the stage right now where it's actually much safer than it ever has been before.

"Point two is that if you don't have it, then any time is the right time to have it...

"With Bitcoin, what I find interesting is I don't see why an FA would not advise all of their clients to put one percent of their liquid assets in Bitcoin...

"I think if you put one percent in there, you have very little risk of any harm to your financial condition, but the potential to dramatically increase that, and I'll just end on saying, what Ray Dalio believes, which is that we're going to have a new paradigm shift in the overall global global macro position, and that may include or may trigger significant increase in gold...

"My view is that in any environment where gold works, Bitcoin works far far better than gold because it's infinitely divisible, it can be sent at virtually no cost, and it's got other characteristics that gold doesn't have...

"Back in the 70s and early 80s, people were talking about putting five percent of your assets in gold because it's a hedge, it's like an insurance policy in case inflation comes back again as it did in the 70s, and I would say that if that's a sensible thing to do, then then certainly to have one or two percent of your assets in Bitcoin makes makes great sense here."

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