Pro trader Gareth Soloway joined Kurt Wuckert Jr. on the CoinGeek Weekly Livestream to talk about the FTX fiasco and what it means for the digital currency markets.
Turmoil in the digital currency markets—Soloway’s thoughts
Soloway is a pro trader with a wealth of experience in all markets. Wuckert begins by asking him for an overview of where we are now in the digital currency markets.
Soloway begins by pulling up a chart for BTC. He says that the bottom for BTC will be $9,000 or thereabouts. He thinks there’s one final flush out and the FTX collapse was the worst of it. Based on his research into the 2008 crash, he believes it will take five to six months to play out due to the similarities between FTX and Lehman Brothers. He notes that there aren’t that many people looking to dump anymore, and the market is adapting.
Wuckert asks whether Soloway is basing his price analysis purely on reading charts or keeping an eye on what’s going on in the wider market. He replies that he’s closely monitoring what’s happening with stablecoins, the potential for restrictive regulations, and more. He manages his risk by never accumulating more than 10% of his capital in anything.
Will it definitely come back again as part of a cycle? We’ve never seen BTC in a monetary tightening situation, Wuckert says. Soloway says we have to be ready for the cycle to be longer. It’s taking longer to bottom, and he acknowledges that the monetary tightening will slow things down. However, he does believe it will rise again like a phoenix because people are simply losing trust in fiat currencies.
What does Soloway allocate to digital currencies compared to stocks and other investments? He says it’s a small percentage. Right now, he’s holding about one-sixth of what he intends to accumulate over the next six months. He also holds plenty of precious metals and stocks.
Wuckert asks what Soloway thinks of the BSV chart and how it both underperformed in the bull market and has done relatively well in the bear market. He notes the massive pop as the leveraged trading positions close, thinking that regulations that limit leverage could lead to more of this.
Commenting on the upcoming Federal Reserve meeting, Soloway urges caution. They certainly aren’t going to be cutting rates, and he still thinks there will be a recession in 2023. He foresees the low will come in the first half of 2023, and then digital currency prices will start recovering.
Back to the AMA with Wuckert
The second half of the live stream is an Ask Me Anything with Wuckert. It focuses more on BSV and what’s going on within the ecosystem.
Q. Was Richard Heart right about central exchanges? If so, where are we safe in ‘crypto’?
Wuckert says he finds Heart interesting because he dislikes him, but he’s shrewd and comes up with many things that end up being right. Wuckert agrees that centralized exchanges are bucket shops run by bad people. He doesn’t know where we can be safe in this industry and economy. Diversification across asset classes is the best bet.
Q. Will the SEC really crack down on the industry? How will this impact the next run?
Wuckert looks back to Bill Hinman’s opinion that Ethereum is not a security because of proof-of-work and some other factors. He notes this was a personal opinion and did not mean the SEC agrees. Since Ethereum is now proof-of-stake, things may have changed, and Wuckert thinks it’s in a bad place. This could have big implications for the market.
Q. What are your thoughts on Coinbase discontinuing wallet support for BCH, XRP, ETC, and XLM due to low usage?
Wuckert notes that Coinbase (NASDAQ: COIN) gives each user a custodial wallet when they join the exchange. About two years ago, they bought the Bread Wallet and turned it into the Coinbase wallet. He would guess the reason is that most of Coinbases’ business would be done on BTC, ETH, and ERC20 tokens. He doesn’t think running the others would cost much, so it might indicate that they are trying to save money, and we should pay attention to that.
Q. What are your thoughts on Bitfinex stopping margin trading?
Wuckert says he’s unsure if there will be an epic short squeeze. If it unwinds rapidly, we could play it like GameStop, but it has to be coordinated to work that way. He thinks they are trying to unwind it slowly so as not to pump BSV.
Q. Has Craig Wright spoken to Elon Musk, given his recent purchase of Twitter?
Wuckert doubts it. He knows Dr. Wright doesn’t particularly like Musk, and he doesn’t much like him either. He respects some of the things Musk has done but thinks he’s a weird mixed bag. He thinks Dr. Wright feels the same way about him.
Q. How will Christen Ager-Hanssen’s appointment as CEO of nChain affect the future of Bitcoin?
Wuckert says he only heard of him a few months ago. He liked him when he met and interviewed him. He became aware that Dr. Wright was getting to know him and was curiously surprised by the announcement. He looked into his career and is glad he’s on team BSV. He’s smart, calculating, hardworking, and wants to engage with the community. He’s also a true believer in the power of Bitcoin as a micropayment system.
Q. Why was the Tornado Cash dev arrested without proper charges, but Sam Bankman-Fried is walking free around the Bahamas?
Wuckert notes that this is indeed curious. He says that The Bankmans and the Frieds are powerful families with deep connections to government and New York and Washington elites. The Tornado Cash guys are nobodies by comparison, and so they are easier targets. The same applies to Ross Ulbricht; Wuckert doesn’t think he’s a good person, but his sentence was over the top. He notes that the media is trying to paint ‘SBF’ as a good guy, but in reality, he’s a thief and a criminal.
Q. What’s the purpose of JungleBus, and what are its long-term prospects?
JungleBus will outlive Wuckert, and it solves many problems for Bitcoin under the hood. It’s connected closely to the node at GorillaPool and allows people to have data services without running a node.
Q. Is there still a risk that GBTC will sell BTC?
Wuckert says he genuinely doesn’t know. He’s concerned by how quiet it is, but he notes that it’s impossible to know what the market will do next. We’ll have to wait and see.
Watch: The BSV Global Blockchain Convention panel, The Future of Digital Asset Exchanges & Investment
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