Michael Moro, the CEO of Genesis Global Trading, a wholly-owned subsidiary of Barry Silbert’s Digital Currency Group (DCG) and one of the largest over-the-counter (OTC) cryptocurrency dealers, says that he can see the Bitcoin price falling even further, before bottoming out around the $3,000 level.

In an interview on Friday (23 November 2018) on CNBC’s morning show “Squawk Box”, Moro was asked about Bitcoin. He started with a technical explanation for the decline in the Bitcoin price:

“From a technical standpoint, it’s absolutely been ugly. I think the drawdown, which started in mid-December of last year, which has lasted basically for 330 days, has seen no abatement in terms of the price pressure. The $5,900 price level that has acted as a support a few times in 2018 really kind of broke down toward the end of last week. We had some institutional buyers come in on the OTC side, but the flow on the retail side was too much. And once the price kind of hit the mid-$5,500s, I think it was basically straight downhill to the $4,200 level.”

Joe Kernen, a co-anchor of the Squawk Box then asked Moro if “we were in a moment where people are saying the emperor has no clothes” and that the bottom was not $4,000 or $3,000, but “much worse than that.” Moro replied:

“I think it really is dependent on your time horizon. In terms of if this a good buying opportunity, if you are a daytrader or looking to make a quick buck and looking at buying a drip here and then trying to sell higher, I think that’s really difficult. I think the key thing to keep in mind for the longer term buy-and-hold investor is that Bitcoin has done this before. This is about the fifth or sixth 75+% drawdown that we’ve seen in the ten-year history of Bitcoin. And so, if you have that lens, I don’t believe institutional investors ultimately care where the price of Bitcoin ends at 2018 simply because they’re looking at things three to five years out.”

Melissa Lee asked Moro that since the Bitcoin price seems to have dropped below most miners’ electricity costs, something which up until now was thought to act as the floor for the Bitcoin price, how he could explain what was going on. Moro answered:

“So the cost of mining is going to go down simply because the hashrate has dropped as less miners are operating. But the largest miners are currently willing to mine at a loss up until that difficulty adjustment happens on the Bitcoin network.”

Kernen also asked Moro whether the Bitcoin Cash hard fork that occurred on November 15th was the main cause for the decline in the Bitcoin price. Moro said:

“There’s no question that the drama that occurred in the Bitcoin Cash network sort of led to the price action that we saw towards the middle and end of last week. But there’s an important distinction to make. This happened on the Bitcoin Cash network as opposed to the real Bitcoin.”

Near the end of the interview, when asked about the correlation between Bitcoin and the stock market, Moro said:

“Ultimately, though, if the institutions are going to get into this space, which we all believe that they will, I think the asset naturally does become a bit more correlated [with stocks] over time as opposed to the uncorrelated behavior that we’ve seen in the history of Bitcoin.”

Finally, when Lee asked Moro what he saw as the floor for Bitcoin’s price, he replied: “You really won’t find it until you kind of hit the $3K flat level.”

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