On 11th August, Charles Hoskinson, the Co-Founder of the blockchain firm InputOutput [IOHK] and the creator of the Cardano protocol broadcast a surprise live AMA [Ask Me Anything] session on Twitter. Here, Hoskinson spoke about the Bitcoin market and trading in general.
Bitcoin [BTC] Dumping
Hoskinson on the Bitcoin market said that the cryptocurrency was just worth a dollar when he joined the space. He continued:
“…then we had the $30, then we went back down to $1 and then we got the $4 and then we went to 256 bucks and then we went to 80 and then we went to 1,200. Then we went down to 250. Then we went to $20,000.”
Therefore, he stated that the value of Bitcoin basically went from $200 to $6,000 over the years, which is one of the best investments one can ever make. Despite this, Hoskinson said that people tend in the cryptocurrency space tend to have insanely short-term horizons. In other words, if the price in short-term falls from $20 to $6, the investors panic and think that ‘the dream is dead’.
The techie, speaking on markets, explained that the reality of the cryptocurrency space is that it is subjected to price manipulation, is traded on thin markets, which in many cases are unregulated with a huge influx of capital. He added that currently, there exists a fair amount of dubious liquidity in this market as space is still too young to be structured.
Hoskinson believes that one has to be either extremely smart or lucky to be winning at the trade. Moreover, ones who bet on the markets can possibly crash a jackpot or lose all the money. In his words:
“…either you have fundamentals or you don’t. If you don’t believe there are fundamentals you shouldn’t be in crypto. If you do believe there are fundamentals then you’ll realize that this is an asset and is insanely difficult to price.”
Next, the Founder stated that the cryptocurrency community panics about market mishaps and price drop, forgetting that Bitcoin has reached $6,000 from a mere $250 in all these years. Regarding the growth of the Bitcoin market, Hoskinson said:
“You know the last point about that is that we have yet to see real institutional money come in. For that to happen you have to have custodial risk addressed, you have to have insurance, you have to have rating agencies, you have to have regulations. That’s all coming. There’s huge investments going into that.”
Lastly, he mentioned that big players like Swisscom, Coinbase and Goldman Sachs are getting involved in the space that might lead to people rebalancing their portfolios. He added:
“…there’s too much money in the world. Thanks to 2008 it’s all floating around, they’re looking for a home and you can only buy so much gold and so much land. So when you create new asset classes that give somewhere for that money to go… So when that occurs, my belief is that it’s gonna have a huge positive effect on the marketplace.”
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