The cryptocurrency market seems to be experiencing what many call ‘capitulation’ with the prices of all major cryptocurrencies tanking across the board for a loss of more than 10% over the past day. To speak about this situation, Meltem Demirors, the Chief Strategic Officer of Coinshares, appeared on CNBC’s Fast Money.
Over the course of the interview, she stated that the market was a “speculator’s game”, as the market was at the long tail of the “crypto asset bubble”.
She was asked about whether the top 10 assets would see any lasting damage due to the extended selloff today. Notably, many major assets saw not only a considerable loss in their prices but also broke through many long-term supports that have been keeping the market in an upwards limbo. She responded:
“A lot of those top ten assets are fairly early in their lifecycle as we’ve talked about before during the dot-com bubble, we saw companies in 2000 we’re trading at 75% to low of their all-time high and that persisted for a long time. Some of those companies inevitably went out of business.”
However, Demirors mentioned that she had discovered a more interesting metric to learn from the dot-com bubble boom. She stated that those that were created in the first six years were the ones that survived the bust. She said:
“[This], to me, indicates that there is a first mover advantage in the crypto game which is why I think we’ve seen Bitcoin which just hit its 10-year anniversary has performed fairly well over time.”
As the market crashed, the trading volume of Bitcoin [BTC] rose by 2x to take on another level of liquidity. Demirors also spoke about this, going on to say that it was difficult to tell how much the volume has increased by. She stated:
“It’s difficult to tell so there’s publicly traded Bitcoin market. Liquidity on those markets today was six billion. There’s a lot of OTC volume that’s not accounted for and a lot of reports have also documented some of the challenges of getting precise numbers which make it difficult to look at.”
She also provided examples of the market itself experiencing uncertainty, speaking about the example of Blackrock. Demirors stated:
“Blackrock for the first time this quarter saw outflows first time in three years or its largest asset manager. I think that’s an important sign as well that this isn’t just a crypto thing. I think in the broader market there’s just a lot of uncertainty and fear.”