Crypto market dump — Is it over or the start of the next mega crash?

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Hello friends. Thanks for hanging out with us here on the Market report today at Cointelegraph. I am your host Benton and we're joined again by resident experts Marcel Pechman and Sam Borgi. Sam Borgi is a business editor at Cointelegraph where he brings a decade of experience in economic analysis and financial market writing. Marcel Peckman applies his 17 years of experience trading derivatives options and futures to the crypto derivatives markets. Fellas, we are on a two week low for bitcoin. There is blood in the streets and I feel like we keep saying this almost every other week. What is going on? How are we feeling? What is your sentiment? Anything changing for you guys since we last spoke? Marcel, what's happening this week? We'll start with you first, Benton.

To be truly honest, before the Jackson Hole or the Fed comments, when bitcoin was breaking above $21,000, I started getting excited again. I think for the third time of the past two months I'm saying, well, we're getting out of this hole finally. It's gonna be good, it's gonna be a good week. But then it happens. You go down below $20,000 and it's all over again. But at least I'm seeing some smart brains on the market as the NFT prices are down. CEOs is down 25%, Celsius is down 35. At least there's some rationality. So it's good.

Good deal. And Sam, what's going on this week? Great to have you.

Well, can't say I told you so, but I told you so, didn't I? No, actually the jury is still out on my call, you know, but nothing really surprises me with what we've seen. You know, I think that we need to see a, probably a bigger fall to really finalize this whole market dump and to actually have a firm bottom. But we're well within the timing band and I'm expecting that to happen the next few months and it's going to be another massive buy opportunity for all of us who believe that bitcoin has a long term future. So buckle up ladies and gents, it's going to be a bumpy ride.

You mean a long term future upwards, right? You're, we're heading to 10 trillion or above.

Yeah, put whatever lofty projections that you want, but you know, we're probably going to be heading there given the current state of the economy, the give the current state of fiat currencies. So it's nice to have a little bit of bitcoin, you know.

And we saw the Dow Jones have just under or just over $1 trillion worth of assets leave the market last weekend on one of its worst trading days. So the traditional markets are definitely sliding right now. Looks like Dow Jones industrial is down almost a percent s and P500 is almost down another percent as well. Same thing with NASDAQ. So traditional markets are sliding, correlating with bitcoin as well as the crypto markets. Here we are again. We are gonna see if we can maintain and stabilize some of these levels. And you saw Masari release a report earlier this week, see, saying that they believed the market bottom has already been in based on a lot of the indicators. You can read that report, but I'm gonna say I'm still with Sam. I still think the September October case that he constantly states on the show is still in play. And we're gonna see what happens. But we have some really good headlines for you to dive into this week. We're gonna crawl across the Twitterverse to pull some of the biggest headlines for you to let you know what's going on in the crypto space. And I want to give a big shout out to everybody that's been tuning in. Cather, I see Rich new design is back. Vikram is back. Great to have you here. I see Radar BTC chime in. Love to have the chat going. So if you have questions for our panel of experts for Marcel or Sam, go ahead and pop them in the chat today. We want you to get those questions answered by our panel of experts here. So again, thank you all for joining today's show. If you haven't liked and subscribed, go ahead and do so now. We're here on Tuesdays, 12pm Eastern. Smash that notification button. All right, folks, first things first, we have to get into our weekly roundup video. This week we're going to get you the biggest happenings on Twitter. So Danilo, let's go ahead and run it back.

Sat big news from Meta this week.

Integrating an NFTS to their platform. Is that a game changer? We're going to find out. We saw a lot of news around NFTs there in our headlines around crypto first, but we do have some funny memes for you this week that we want to get into to start things off. So let's go ahead and get the memes going. Let's get the meat train going. While we're getting the memes going, I'm going to go to the chat. Catherine Rhodes question Spitfire question for Marcel or Sam. Where is the bottom do you have price levels that you're targeting? And then we'll go ahead and jump into memes. After paying all fees. Ethereum logo makes sense to me. Open wallet with nothing in it. Got a thousand x multiplier. 110 US $10. I invested in crypto only. What you can afford is right. Pretty good first day in crypto. Five years of crypto. Yeah, that's about right. You start getting the gray hairs, man.

Yeah, yeah.

Just friend. What do you cause inflation? Yep, that's right. That's on par right there. Good memes. All right, quick question for you. What price levels are we looking at for bottom? And then we're going to get into some of our biggest headlines. I want to make sure we answer Catherine's question from the chat. Marcel or something. Jump in.

So I would stick with $14,000 for Bitcoin. I think there's room if the s goes down 20% from here. If that's. If the S P doesn't go down 20% from here, I think 17,000, 18,000 will be the ultimate low.

Say, concur, disagree.

Can't disagree with Marcel there. I mean, I don't have an exact target. My, my target was always 15 to 16K. But you know, the bottom might fall and fall out of bitcoin. If we see a bigger correction in the stock market, again, it's going to really depend on what happens in the fall. I've mentioned it before. It's usually a very volatile time for stocks. And you combine that with the inflation, with the Fed, with the, you know, recession, everything is. It's a really not a favorable macro backdrop right now. So the prices won't surprise me if it goes below that. But again, it's going to depend on what the stock market does in the short term and how things kind of play out in the next few months.

Yeah, I'm targeting potentially 14k. We're going to see if this 19k range holds. Previous low was 17k. So if 17 doesn't hold, I'm looking at 14k dollar cost averaging all the way down. Folks, we got some big highlights this week. What happened with Mount Gox? Well, big headline came out this week. Mount Gox rumors panic, Bitcoin, Twitter as BTC price returns to 20K. Well, what happen here, folks were panicking because claims that 137,000 bitcoin are about to be offloaded on the open market has met with intense suspicion as BTC price volatility returns. So what happened here, guys? And, and real quick for those that are tuning in and don't know about Mount Gox is something that happened way long ago. Marcel, can you kind of fill us in? What was the Mt. Gox hack and why was it so significant?

Okay, Bentham, so Mount Gox was the biggest bitcoin exchange in the world back in 2012, 2013. And when I say big, it had 70 to 80% market share. If you think Binance is big today with 25% market share or 30%, Mt. Gox had more than double of that market share and it was badly managed from the get go. And so it was hacked multiple times over the years. And finally in 2014, all of the coins of Montgox were drained and the exchange became insolvent. So basically a bankruptcy. A few years later, they found out a forgotten wallet with 200,000 bitcoins which is still being going on at this dispute. Part of the coins have been sold to pay for the process and attorneys and lawyers and stuff, but there's still 137,000 bitcoins waiting, sitting on that wallet, waiting for the justice decision if it's going to be sold and money is going to be given back to the investors. But looks like the coins themselves, the coins themselves will be given back to the original owners. So to the clients of the Mount Gox exchange. But the date, the final date has not been set yet. So every year we hear this story. No, the coins are going to be released. They're going to be sold on the open market. So this story has been ongoing for at least four years, but there is no final date decided yet. But the coins exist.

Yep. And lots of rumors swirling around these 137,000 Bitcoin. So I want to pull back to the article real quick. Danny Devon said there's so much false information floating around Twitter. So let's clear something up. Mount Gox isn't releasing all 137,000 Bitcoin tomorrow. It's starting the repayment process tomorrow. So creditors will begin to receive their bitcoin. The entire process will take months. He also notes that also, this is only for those who choose the early lump sum payment, which means they only get a portion of their bitcoin. Those who wait until the end of the civil rehabilitation period will get more, which is years from now. So, folks, this is all going to happen at once. No need to panic. This is a nothing burger. This is just news to be aware of. And for those that were involved with the Mt. Gox hack, I'm sure you are very eager to get your Bitcoin back, or at least some of it. So that is what's happening there with one of the big headlines. But folks, we need to get to bitcoin, the big old bitcoin. What happened this week? Well, bitcoin price briefly falls below 20k on a bunch of nothing from Powell speech. And we had talked about the Jackson Hole meeting last week. Sam, what is, what was your take as bitcoin continues to slide after Jerome Powell's comments last week? I'm curious to hear your thoughts of why you felt like this could have potentially impacted the markets or not.

Well, in terms of Powell and what he said, I think that particular speech was a, was a big nothing burger. We didn't really get any, any, any kind of new information about where the Fed is thinking, what it's going to be doing. But overall, I think the writing is on the wall and that the Fed is still prioritizing taming the inflation beast. And what's actually pretty surprising is that if you take a look at the Fed's dot plot charts and what their forecasts have been, they've actually been doing what they said they were going to do. And that simply means more rate hikes, more tightening. So I think that in general, investors are really getting, coming to terms with the fact that we're still in a tightening cycle. While tightening by the Fed standards today, rates are still going up. And you know, those of us expecting a pivot sometime soon, you do recall that they just changed the definition of a recession, right? So they're already doing their tiptoeing, they're already doing their, their, their games to kind of make it, make it show or make it seem like we're not actually in a recession that's going to give them more Runway to continue raising rates because again, even if they don't, even if inflation goes to zero in the next three or four months, we're still going to have a CPI that's like three times the central bank's target rate. So I don't expect their, their tune to change anytime soon unless we get a massive, massive crash in the stock market in September and October. I think the Fed has some appetite to let the market sink and I think we'll see a pivot or at least a softening of language perhaps into next year. So right now, for me, it's the status quo with the Fed. They're doing what they have to do to save whatever legitimacy they have left. Inflation is too high. They can't let it run even hotter. So keep your eye on the CPI report going to come out in the next few weeks. That might give us some more indication as to whether what they're doing is having the desired effect, which is limiting demand and hence reducing cost pressures.

Go ahead, Marcel.

Sam, I have a question for you. We've been here that the Federal Reserve is actively monitoring the markets and the S and P and whatever, but isn't, isn't their primary concern or shouldn't it be employment and the value of the dollar itself?

Well, that's actually a really good question. So you know, the Fed has dual mandates. Full employment is one of them. Economic stability or economic growth and price stability. Right now it seems like price stability is carrying more weight. That's not going to be that way forever, obviously. But given just how embarrassing their call was on inflation, just, just how badly they screwed everyone with their inflation call, I think now they have to save face and they have to prioritize taming the inflation beast. Obviously, if the economy crashes in the next couple months, you're going to start to see a pivot, right? They don't, they wouldn't have a choice. But right now I took the signal from the fact that they've redefined what a recession is, which means that they're trying to finagle their way out of actually having to pivot right now because they can't, because inflation is still too high. So that for me is where the main battle front right now is going to be on inflation. And that's the way it's going to be for the foreseeable future. I think.

Real quick, I want to pivot back to the article for a second. And so for those who don't know the comments that Jay Powell said, reducing inflation is likely to require a sustained period of below trend growth. Fed Chair Jerome Powell said, moreover, there will likely be some softening of labor market conditions. While higher interest rates, slower growth and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain. So to Sam's point, their focus seems to be on this price stability. And it looks like Parish has a question. Is there relief rally before heading back down? I'll let either one of you jump in here and answer this question from Parish.

Well, Marcel, we had a pretty nice relief rally, didn't we? I think, you know, a few weeks ago that, that for me seems like it was a pretty, pretty big relief rally. Usually bear markets do have violent relief rallies. Violent rallies, not so much in crypto. I mean Marcel mentioned last week about how bitcoin or a few weeks ago about how bitcoin rallied pretty sharply from its bottom, you know, from 16 and change up to 25, which is a pretty, pretty big rally. So anything is possible. But I think right now the least resistant path is lower.

Yeah, and Danil, if you wouldn't mind just pulling on my screen real quick. The article actually pulls an expert from capo crypto and he went to paint short term relief targets between and 23,500. But to the downside of 19,000 and 16,000 we're now in play. So you can go ahead and see kind of his chart and it looks like we have tons of room to continue to slide downward. So these, these conditions only appear to be keeping to get worse in the traditional markets which as we know are correlated to the crypto markets. Folks, let us know what you think about G.A. powell's comments last week. Was there a nothing burger? What did your take from what he said? Let us know in the comments there. We want to hear from you. Last thing that this article talked about was the DXY and how it correlated with bitcoin tops and bottoms. Is this an indicator that you guys are using at all? And if so, what is the value of using that? Let's start here with Marcel first.

Well, the DXY measures the US Dollar against a basket of foreign currencies. So the euro, the pound, the yuan from China, the yen from Japan, so a basket of other currencies. So this indicator has recently reached a 20 year high. So the dollar is gaining value against other currencies. So yeah, it's an important measure. It's an important metric. It's a matter of trust. If the investors are fleeing risk markets, including cryptocurrencies and heading to US Treasuries or the US Dollar itself, then the dollar gains value. If investors think no, the US government is going to default, there's no way they're going to get out of this inflation without a huge crisis. We're going to move our money to gold or to Europe or whatever. But outside of the US dollars then the DXY would be declining. But that's really what's not what's happening. So the US Dollar is gaining strength according to this indicator. So it's really important.

And we saw that the euro lost parity with the dollar this last week as well. It continues to be below the value of a dollar. So interesting times ahead for sure. The DXY is an important indicator as Marcel said. All right, let's get into some Ethereum. We know the merge is coming up. Everyone's been talking about it. We all know it. Let's go ahead and get into the Ethereum article for this week. And I know Marcel's got some goodies to dive into today as well. So one of the big headlines from Coin Telegraph this week was eth whales move holdings onto exchanges before the merge. So the top 10 Ethereum non exchange addresses have seen an 11 decline in their holdings over the past three months, while on exchange, whale addresses have seen a 78% increase in. Guys, what is this telling you? That whales are moving to exchanges? Typically when we see this, that means they're going to be selling. But is that the case here? What are your thoughts, Sam? What does this typically tell you when whales move their. Their tokens to exchanges?

Yeah, is this going to be like a buy the rumor, sell the news type event? You know, buy the rumor, sell the fact. We did see a nice rally for Eth on a lot of the anticipation of the merge, but I think we could see a pretty big dump on actual merge day if it does go according to plan, which wouldn't be, you know, uncommon for assets to actually decline on on news. Right. You buy the rumor and you sell the fact. I think typically when you see, you know, coins going onto exchanges, a lot of times it's a precursor to selling pressure. So. But you really can't predict the future of price is based on that because just as coins can flood exchanges, they could also go off exchange just as quickly. Right. Remember a lot of the. The on chain Bros were telling you about why bitcoin was going to go a lot higher earlier in the year because of the exodus from exchanges. We saw an outflow from exchanges, then boom, in one day with the Terra ecosystem. Nonsense. We saw, what was it, hundreds of thousands of BTC go back onto exchanges and then the selling happened. So it's. It's hard to use that as a signal. But I think overall, if you take a look at buy the rumors tell the fact, you too tend to see that quite a bit in asset classes. And I wouldn't be surprised if we saw a decline on merge day or thereabouts.

Go ahead, Marcel.

I don't agree here, Sam, because in that specific case, if you're going to get a free fork coin and you want to sell the. You want to be the first to sell the fork. If you think the fork is going to zero within two days, you got to have the coins deposited at exchange as early as possible. So if your exchange is going to take part, it's going to offer the fork coin trading immediately. So if you have your Ethereum deposit exchange, you're going to be one of the first to make the sale. So I think it could be more related to the 4 coin itself than to the Ethereum. The buy, the rumor, sell the fact.

So I have a quick question. We talked about kind of like the, the technicals about how to receive the new ETH last week, but if you're sending your tokens to an exchange wallet, are you still getting airdrop that new ETH proof of stake token or how do you, how do you know? Like if you're getting it, is it. Do you know the mechanics of how that's working?

Yeah. So if the exchange said yeah, we're going to support the fork, so technically they're going to be awarding you the free coin eventually. It can take an hour, it can take a day and take a few weeks. But if they already said they're going to support the fork, then yes. But there's no guarantee that the fork will be immediately granted. And even if they award you the coin, there's no guarantee that there will be a volume or significant trading. So I think it's risk. It's a big risk to do that. I'd rather stick to the coins with my own cold wallet or my own. Even a hot wallet outside of exchange. And then after the merge I would send them to the exchange that has the better rate or a better volume.

Good advice. I think I want to play it safe here and make sure that I'm getting my tokens, no shutdowns or pauses or anything like that. So thanks for the insights there, Marcel. A quick question from the chat, Cardano Green. Are there any POW coins, proof of work coins that may benefit from an influx of miners leaving eth ergo ETH classic. What do you guys take here?

I'll go with Ethereum Classic as well. I think if it's well worked by the developers and they incentivize the smart contracts and NFT to launch alternative versions, yeah, maybe they can get some traction.

Fair enough. Real quick, pivoting back to the article, one last point. So a little counterpoint to what we were talking about here. Crypto rover says he thinks Ethereum will drop so hard on the merge day, the whole anticipation is getting not bought up on the spot market, but on the futures markets. Be warned. So I'm gonna be. I'm gonna say I think I'm in The school of thought, this is going to be a sell off on the merge day. So I'm gonna have to agree with, with Sam's take here. I think we're going to see a sell off where it's buy the rumor, sell the news. We saw the buildup of a couple weeks ago, we held just around 1400. I think we're going to see a thousand dollar eth in the, in the weeks ahead, no doubt about it. So I'm going to be dollar cost averaging in all the way down. But I'm optimistic, I'm long, I'm bull, I'm bullish long, long term on E. So we're gonna see. All right, that was our biggest headlines for this week and so if you have questions for us, make sure you pop it in the chat. If you haven't liked, subscribe Cointelegraph. We are here on YouTube, the Market Report on Tuesdays at 12pm Marcel's got some goodies to go into this week about bitcoin. He's got the bitcoin updates, everything that you need to know about bitcoin. So I will let Marcel go ahead and take it away.

Hello darkness, my old friend. So the total crypto market cap touched $930 billion low this Sunday, levels unseen since mid July. But more importantly, Bitcoin's most relevant derivatives metric entered in backwardation. So what happened? The futures contracts were trading below the regular spot exchange prices at Coinbase and Binance and etc. So Danilo, I'll share my screen please. So here we have the total market cap chart and you can see that we briefly touched $940 billion. We're back above 960, but it's still far lower than two weeks ago at $1 trillion. So here you have the futures premium. So we're basically dividing the price which is trading at FTX futures and Binance futures against Coinbase and bitstamp, for instance. So on regular markets, on neutral markets, this premium should be trading between 4 and 8% annualized to compensate for the money that's going to be locked up for one month or two months until the expiry date. So over the past three months what the chart is showing us, it's a lack of demand from leveraged buyers. So it's a neutral to bearish market. But still we haven't seen over the past three months a negative premium. But that happened when market dumped on Sunday, so the premium went negative. So it's saying that was excessive demand for leverage shorts, which is definitely not Good. And currently we have a 0.5 0.6% premium, which is also not good. So we're definitely not out of the woods according to the Bitcoin futures premium metric. Thank you, Danilo. Now let's move on to the on chain data. So both Bitcoin and Ethereum we now have less active addresses, so less users than compared to what we had in the early 2021 in January 2021 when the market was also trading near 1 trillion dollar total market value. Danilo, I want to share another screen please. So in both moments we had 1 trillion dollar value, but currently we have less active addresses. So for instance in January 2021 we had 560,000 Ethereum addresses and 1.1 million Bitcoin active addresses. And this number is down 15%. So Ethereum 446,000 addresses and Bitcoin 900,000 active addresses. Curiously the TVL. So the deposits on smart contracts at that time, early 2021 stood at $20 billion. And currently we have $60 billion of deposits on smart contracts. So the market grew but the number of users did not. So I think that's a problem. Thank you Danilo. But it's a chicken and egg problem. Are the prices depressed because of a lack of new market participants or the water way around? So I don't know the answer personally I think we are in a bear market because of two problems. The first one is pressure from regulators on stablecoins, on altcoins being deemed as securities. And the second one, as we spoke earlier, is the Federal Reserve raising interest rates. But those two events will eventually dissipate. So the question you have to ask yourself is can a strict regulation environment kill your project? Meaning if decentralized entities and stablecoins are not allowed anymore, would it severely impact the token price? If not, you're going to surf it no matter if the bottom is going to be $14,000, $15,000. If your project is truly decentralized, regulation cannot kill it.

Excellent points. So I want to circle back on a real quick point that you brought up is that there has been no growth of like wallets. So what does that by by not bringing in more new wallets. That's telling you that the, the actual amount of participants are not growing. It's stagnant.

Yeah. Meaning we had the the defi summer with the TVL going from $20 billion up to $160 billion now down to 60 billion. We had NFT projects gaming metaverses. But the number of users in Bitcoin and Ethereum did not grow. It's down 15% since earlier 2021. So I don't think that we need new participants every year. But I do think that across a span of two or three years, if the market is not growing, that's definitely not a good sign.

Marcel, you mentioned that regulation is one of the potential hurdles and that it's not going to last forever. So are you expecting there to be some kind of favorable regulatory developments moving forward, or do you think that it's just going to be a lot of the. A lot of the decent, a lot of the centralized projects are going to go by the wayside?

Okay, Sam, good question. I think regulations, especially in Europe and United States, is going to be tough. It's going to be harsh, especially against stable coins and altcoins that have been launched by VCs and by a corporate team and wherever which should be effectively deemed as a security. Which is not the case for Ethereum, but that's case for another day. But most altcoins could be deemed as a security. But even if the regulation is strict, it allows investors and market participants to decide for themselves, okay, we think this project has been cleared by the sec. We think it's worth investing. But currently, as it stands now, it's a gray area. Nobody knows if it's a security or not. Nobody knows if the stable coins will continue working as they are right now or not. So there's too much fear and uncertainty and investors hate that. So when you get the uncertainty out of the way, it's going to be good for markets.

And keep in mind, the XRP case is supposed to wrap up at some point in early 2023, which could also create a precedent. So we're going to see how this regulatory environment shapes up. But I think you're absolutely right, Marcel. It's going to come very harshly here in the States and in Europe. So let's see how the markets react to that and how that impacts the future growth. But great. Thank you for sharing your insights today, Marcel. Always the best when it comes to Ethereum and Bitcoin. That's why we have them here on the show, folks. All right, we are going to move into our markets Pro segment this week. We have two of the coins that you should have been watching because of the vortex or newsquake alerts that you get on this app. So let's go ahead and dive into our first token this week. The let's get into Markets Pro. All right, well, it's loom. And if you would have received this Newsquake alert on August 25 that went out this informed the Markets Pro subscribers that Binance was adding several trading pairs. Among these pairs was Loom Busd. Just hours after this news, the price of Loom went from about 4 cents to all the way up to 6 cents. A rapid fire increase of 42%. And on the bottom there, you see the newsquake alert happening in that white line with the price surge. That's why you get the news quakes. That's why you act on them and you're able to trade on it. 42 gains. Love it. Okay, moving on the Vortex score, what happened this week? Well, synthetics, that's what happened. As the crypto market continues to adjust to turbulent conditions, it is unsurprising that few tokens are acting in accordance with historical patterns. However, SNX was one of the few assets to see excellent price movement after a high Vortex score this week. On August 27th, soon after a green score, Flash S X's price shot up from 2.66 to its weekly peak of 3.11. That's an increase of 17%. Wowzers. All right, you see 82s on the Votrox score, you get excited. And that's what happened with Synthetics this week. And that's why you got to have Markets Pro on your laptop, desktop, phone. You get these alerts, you're able to trade even in these times, gains can be made. And all aboard the gains train because that's what Markets Pro does for you. All right, guys, I want to get some closing thoughts today. Let's start with Marcel and then I'm going to keep an eye on the chat, see if anyone has any last second questions. Marcel, give us your closing thoughts. And what are you going to leave us with today?

Okay, man, so what I'm going to tell the viewers or advice is don't chase the gains. After the coin rallied 40 to 60% in two days. It's usually a terrible idea to start your research, start analyzing the coin after it already jumped 30 to 40% because you're late in the game. So you have to start analyzing during the bear markets and think, well, Those are the 10 coins that I like the most. So if a setup emerges or a news flow, a positive news flow emerges, I'm gonna buy one of that, those coins. So don't start analyzing or studying the coin after it already breakout from lows. It's up 30 and 40%. So stop chasing gains and wait for momentum. Wait. Okay, this coin is good. I think it's trading at $25, maybe can go back down to 17 which is the low six months ago. So leave some beats there. So don't get overly excited and pay local heights.

Well said, Marcel. Thanks for sharing your thoughts. And Sam, any closing thoughts here? I'm going to keep on the chat, see if anyone has any last second questions for us.

Yeah, as Marcel said, bear markets are usually the best time to be researching and analyzing projects. And you know what, you're in luck because we're in a bare market and it's probably going to last quite a bit. So it's going to be quite a bit of time for us to really pick and choose which project we want to invest in, which ones we want to speculate in. Remember to kind of treat your investments, you know, you have to kind of you got your solid investments like Bitcoin, you have your more speculative bets that if you want to take a look at some up and coming projects that are might be more more risky, you might want to be able to allocate accordingly to more risky projects. But you know, crypto will live to see another day and live to see another bull market, that's for sure.

Looks like we do have one question from Queen Thoughts on Polkadot long term? What's your guys take on Polka dot? Marcel. Muted you muted my man.

Oh sorry. I think it's promising. It has the Web3 foundation, it has all of these subnets, the parachain auctions. It's interesting system but it hasn't been tested in real life. So it's similar case to Cardano. There's a lot of talking, there's a lot of development, there's a lot of promises. But when you check, well, okay, what's the tvl, what's the differential in practical difference for developers and for users? Currently there's none. So I don't see a big advantage for this to remain as a top 10 coin. Had we been talking about a $10 billion coin that can go 10x okay it would be the case. But it's already a huge coin. It's already top 10. So I think it has to deliver first so we can reanalyze and think well can it go to a top five? But right now I don't see it standing in a top 10 position.

Sam, do you have similar Takes a.

Lot of a lot of the smart contract competitors have been kind of shiny new toys over the past little while. They've kind of outshined Polkadot in terms of, you know, mass appeal and in terms of news and community involvement, but some of those projects have run into issues of themselves. So I think if Polkadot can continue to actually build and attract developers and attract different projects, it might have a solid future. But right now I don't really see it as a big competitor. But it's hard to really gauge where these projects are right now. Unless you actually do a deep dive and do some research, there's going to be a lot of competition. So I think the future will have more than just Ethereum as a smart contract protocol. I'm not convinced that Polkadot will be a main competitor, but only time will tell.

Yeah, try to explain Polka Dot to your friends and unravel. Unravel that rat's nest with Kusama and substrates and this and that. It's a complex system. I think I'm bullish on it long term. But to both, you know, Marcel's and and Sam's point, it seems like they are very, very heavily focused on development and we haven't seen too many amazing products built on top of that chain. So thanks for the question there. Looks like crypto dude 81. How long will the bear market last, do you think? I start to DCA now? Sam, I know you had a comment about this earlier, but if you want to just reiterate for crypto dude 81 here.

Yeah, I think that DCAing into Bitcoin is never a bad idea, especially at these levels. Can bitcoin go lower? Absolutely. Will it? I think it will, but the jury is still out in the long run. In a year from now, two years from now, does it really matter whether you DCA that's 16, 17, 19, 12, 11, 10. You know these are just academic discussions, right? I think you have to allocate according to your risk profile and it's not not investment advice. But ultimately in the long run, I don't think it's going to really matter. So I wouldn't wait for a bot. In fact, don't time bottoms because unless you're a professional trader, we're gonna fail. I mean, we were talking before the show about how confident I was in the four year cycle and the four year cycle actually played out. But I couldn't time the top because I had no top indicator or very few top indicators holistically last year when I looked at the market. So timing tops and bottoms is notoriously difficult. Just DCA at a level that you're comfortable with and do your research to know whether this is an actual asset that's going to have long term Viability.

Well, come on, Marcel, anything to add there?

An NFT rock was sold for over a million dollars. That's not a top sign.

Right? Yeah. DCA on the way down, DCA on the way up.

Yeah. And the President was buying a. President of a country was buying Bitcoin on the toilet. Right, that's. In retrospect, that was probably a top signal as well.

Tons of top signals. Thanks for the question, Crypto dude. Catherine Rhodes with thoughts on Polygon. This will be our last question for today. Marcel, what's your general take on Polygon?

I think Ethereum will struggle with scaling for the next at least 2 years. So any scaling solution using either layer 2 or layer 1 doesn't matter which is EVM compatible, so the developers and the users don't have to learn or rewrite the code from scratch will be useful. So I think Polygon has a future at least for the next two or three years.

Very good.

And Sam, I haven't thought about Polygon in like six months, so I can't give you an actual, an actual coherent response, but I think it's one of the, you know, the, the big names that I think if you do hold a bag I would, I personally wouldn't sell my Polygon bags right now at these levels. So you can take that information and use it as you see fit. But obviously it's not investment advice.

Yeah, it's one of the Premier L2s right now. You know, obviously competitors are arbitram and Optimism. Polygon seems to be, yeah, Polygon seems to be kind of leading the way with their zero knowledge roll ups which I think will be a huge, you know, huge implementation to the ecosystem and against anything that's going to be scaling Ethereum the biggest chain right now when it comes to the defi ecosystem building Dapps, things like that. Think it's going to be a value add long term. I think any Polygon holder right now below a dollar is going to be happy. Hold on to those Polygon bags folks. Bare market's going to be long. Like Sam and Marcel said, future is bright though for crypto. That's why we're all here. All right folks, well that is going to do it for today's market report. We appreciate everyone for tuning in, asking you our questions and hopefully you had some fun and we appreciate everybody make sure you're here next Tuesday on 12 o' clock on Tuesdays. This has been the Marker report and until next time, we will see you when we see you.