Demirors told Sorkin:
“For us at CoinShares, the view is we’re gonna stay where we are for a while. There are no near-term upside catalysts. We have yet to see Bitcoin in a recession. Are we in a recession? We don’t know, but with what’s going on in the eurozone, around the world, and here in the United States, with the Fed hiking rates and cutting back on their open market activities, certainly expect more pain ahead for tech stocks, growth, and also crypto.
“I think the big question is what are traders doing. What’s happening in markets? We obviously had a lot of liquidations, a lot of insolvencies that had a massive impact on the market… We’re talking about 10, 20, 30 billion dollars of capital that has basically evaporated overnight, liquidity that’s gone out of the system, and we haven’t yet seen the full impact of that because most of the companies in this industry are not publicly listed, so we don’t get that transparency.“
And when asked for her prediction for the Bitcoin price for the next 24 months and what she considers to be the downside risk, she replied:
“That’s a great question. I think that’s absolutely the right framing for long-term investors, which is what we’re focused on. Look, Bitcoin is and has always been a secular trade. It’s a very cyclical asset. It goes through these cycles of ups and downs, highs and lows. Historically, drawn down from peak to trough has been 80 to 90% in Bitcoin. We’re currently sitting at about 65% from our all-time highs in November of last year.
“So, there is still room for some downward correction. We at CoinShares don’t see Bitcoin going below that $14K threshold, and we’ve seen strong support around $20K… I think, in the next 24 months, we will see new all-time highs in Bitcoin.”
Sorkin then asked Demirors where crypto developers are moving to these days in the midst of the current bear market.
“I think the important thing is it’s no longer just the engineers. At the end of the day, I’m a TradFi girl, right? It’s all about fundamental sustainability of these businesses, whether it’s a company, in the case of tech stocks and crypto companies like Coinbase and others, or whether it’s a protocol, you still need to have money to be able to pay people.
“And the sad fact is that many of these projects, these protocols, are going to run out of money to pay engineers. Many companies that raised at really high valuations are going to have challenges attracting top talent who want to work in the industry, but are looking for that risk-reward opportunity that’s currently not there.
“So, we are seeing a lot of… new people coming into the industry for choosing to start new companies or join younger upstairs as opposed to taking some of the risk associated with joining a later stage company, really high valuation, not necessarily as much upside.“