Fidelity May Add $2,000 to Bitcoin’s Price, the Bitfinex's $1 billion IEO | Crypto Markets

Hi, I'm Giovanni, and today we are with senior market analyst Mati Grimspan from Etoro. Hi, Mati. How are you doing today?

Hey, how's it going?

So, Mati, we have seen in the last few hours that most cryptocurrencies posted moderate losses. Do you think it's a correction, or we should be worrying about it?

Not at all. I think that that's actually kind of zoomed in a little bit too much. You got to zoom out a little bit, because if you'll notice the trend overall, this is the declines that you're talking about. Right? So that's not too much. What we're seeing now actually is kind of an upward consolidation pattern. And in the video last week, we discussed the possibility of a Bart Simpson pattern emerging. And a lot of the time, what happens in the crypto space is you get a surge upward and then this kind of consolidation, which kind of looks like Bart Simpson's haircut, and then a surge down on Friday, we actually saw a continuation upward. So now what we're looking at is more of an upward trajectory. You see now instead of looking like Bart Simpson's haircut, because we had that continuation in the middle of April and then another continuation last Friday, now it looks like we're actually have an upward trajectory, which is quite a bullish pattern. And even if we come down, you know, to the bottom line here, it doesn't break that pattern. So certainly past performance is not an indication of future results. Not ever? Not never. But as far as technical analysis is concerned, this is a bullish sign.

Thanks, Mati. And what do you think about altcoins? Because as far as I know, like, they are underperforming bitcoin. Do you think it's like a trend which will continue, and what do you think is the cause of it?

So, yeah, we're just coming off the back of alt season. On April 2, that surge put the focus back onto bitcoin, and we can see that bitcoin is actually kind of in the driver's seat once again. A lot of the time, what happens is because most of the volumes in crypto these days are on exchanges that are crypto to crypto rather than fiat to crypto. And we've seen that trend kind of growing. So as that happens, certainly we know that there's a correlation where all of the cryptos tend to move in the same direction. But of that, you'll have times where bitcoin is the leader and that, you know, and then there's times where bitcoin is the lagger in this case. We can see that bitcoin is the clear leader at the moment.

Okay, so now let's talk a little bit about the latest news. Bitfenix is going to raise $1 billion for, for its IEO, but a lot of people are quite skeptical about it because of the latest scandals surrounding the firm. So a lot of people are saying that this is going to be a bailout and not an ieo. What do you think they are going to really manage to raise such a big amount of money despite the crisis?

I'm quite skeptical that they'll be able to hit that target at the moment. If, you know, if the founders were trying to raise that kind of money for an actual project, they might be better off just doing it under a different name. I'm very skeptical of the way that they've announced this. As far as I saw, the announcement was made on some sort of a WeChat group. Not this, not the traditional kind of press release that you'd want to see when somebody's trying to raise that type of capital. The amount in question is also very suspect because they were. They were reportedly missing $850 million. So if you say, okay, a billion, that's like 850 million plus a little bit of spare change, you know, I think it's going to be very difficult for them to raise that kind of money. With the sentiment being as it is at the moment, at the moment, Bitfinex and Tether are in so much trouble that you can see that there's a premium that's opened up across the exchanges. So this site, Cryptowatch, allows you to track the price of bitcoin across different exchanges. And Bitfinex, you can see, is right now trading around $6,000, whereas on other exchanges around 5,630 5,640. Which means that if you want to buy Bitcoin on Bitfinex at the moment, it's going to be about 320 to $360 more expensive. And the reason for that is because of the lack of trust and tether.

The.

The lack of trust. Trust and Bitfinex in general. Clients are trying to bring their money out, and when they do that, basically the demand for Bitcoin actually goes up. So the important thing to remember here is not the amount. I mean, it's worthwhile keeping keeping an eye on the amount. It seems that the premium is not able to exceed about $400, because then you'll get like some arbitrary arbitrage traders who will you know, sell or who will bring their money into Bitfinex in order to arbitrage that that premium. But the important thing to remember here is that if there is any sort of erosion in the trust of Tether or Bitfinex, there's $2.8 billion in Tether's market cap at the moment. So that money is most likely to cause buying pressure on Bitcoin, as we're seeing here.

Thanks a lot. So now talking about the news about Facebook Coin, we know that this is a project that it's very real and it's being developed right now. So what do you think Facebook Coin is going to be competitor of Bitcoin or they are going to coexist peacefully and do you see any impact on the market regarding Facebook Coin?

That's an excellent question, Giovanni. And the answer is we simply don't know. The facts that we have on the ground is that Facebook has put one of their main managers in charge of this project, that they have about a staff of about 40 employees working on a blockchain project. There have been leaks, most notably by Bloomberg and the New York Times who quoted sources. Now obviously they weren't able to bring those sources forward or public. So we don't know who said what exactly. But we have to realize that, you know, the New York Times or Bloomberg aren't going to run with a story without actually doing their homework. So we can probably assume that the narrative out there is correct, which is that they're working on some sort of a peer to peer coin that can be sent over WhatsApp. This is kind of similar to what Kik is working on with Kin and what Telegram is working on with, with their, with their ton or gram coins. So this is most likely what we can expect. The question is going to be about decentralization. We don't know how decentralized it's going to be as Facebook is quite a centralized company. We don't know. We also don't know how it's going to interact with other cryptos, how they're going to interact with the local regulations. If they want to have a borderless payment system. That means that Facebook is directly going to have to answer to regulators across the, across the globe as well. So at the moment it's really too soon to kind of speculate what that's going to look like and how it's going to interact with the crypto market as we know it.

Okay, and now I wanted to ask you something about the upcoming consensus event. So in the last few years we always saw the price of bitcoin rising just before the event took place, except last year. So what do you think is going to be the pattern this year?

Yeah, so the consensus effect is basically a theory where because so many people in the crypto industry get together, it can actually have an impact on price. Now, prices in crypto, this is not too far off the truth, because a lot of prices in crypto are actually relying on network effect. And when you get so many people who are part of the same network and then they are able to strengthen their connections by meeting face to face, this actually strengthens the entire network. So, yes, I do believe that the consensus gathering, where so many people are going to be able to see each other, you know, shake hands, work on deals that they've been planning on, you know, start setting things in motion, that certainly strengthens the crypto community and the crypto environment as a whole. Whether or not that translates immediately into price, we'll never really know until it happens.

So let's talk about Fidelity. Fidelity is going to introduce trading, crypto trading for institutional investors. This is like a very big news. What do you think? What's going to be the impact of that?

That's a good question. And Fidelity has been working on this for quite a while. We know that they've done a soft launch, so they probably onboarded some of their customers who are most interested already. It seems very positive from everything that I see. I mean, there's. They're not, certainly not the first institutional player to offer crypto for their clients, but they are actually very likely to be the biggest. What the demand from their clients is going to be, we'll have to wait and see. But I think that this is. This is something that can move the liquidity of the entire market significantly forward.

So how much money from institutional investors do you see coming into the space after Fidelity will launch its service for institutional investors?

Well, we can really only speculate on that. I know that they have upwards of a trillion dollars under management. Let's say even 1% of that, if that goes into crypto, if all of their clients diversify with 1%, I think that's maybe a bit of aggressive to think about. But if we think about in those terms, you know, that itself could drive the price of Bitcoin up $1,000, $2,000 easily. The question, though, remains, are they going to see that kind of demand? My feeling is that it'll take them a while before they're able to explain to their customers how this is beneficial for their portfolio and then it'll take a while before the crypto market looks attractive enough for those customers. It could all happen at once. It could happen over time, but it's worth keeping an eye on.

We were here with Mati Grispan from Etoro. Thanks a lot Mati and see you next time.

Yeah, thanks a lot for having me. Have an awesome week ahead.

This episode is sponsored by Trade Santa. Trade Santa is a cloud based trading bot. Set it up in less than two minutes, trade multiple pairs, choose between long and short strike strategies, use tech analysis indicators and see your results in real time. Trade Santa works 247 to get you the profit you set. The platform is already integrated with Binance, Bittrex, Bitfinex and hitbtc. The link is in the description below. Cointelegraph like subscribe and Hodl.

It.