Is Now the Right Time to Buy Bitcoin? | Mati Greenspan & Michaël van de Poppe

In times of crisis, all correlations go.

To one quantitative easing. I expect tech to be bullish.

For Bitcoin, liquidity reigns supreme.

One day people will leave the dollar for other commodities or other assets and that period will come in the next years.

What's up YouTube? My name is Jackson. Today I'm joined by CEO and founder of Quantum Economics, Mati Greenspan and and trader Michael Van de Pop. How's it going today guys?

Yeah, having fun.

It's going okay. Living at my parents, which I didn't expect to happen again, but it's okay.

Yeah, it's different times for sure. So on March 23rd, Michael, you wrote an article for Cointelegraph identifying targets for bullish and bearish scenarios. You said as long as 6,800 to 6,900 is not broken to the upside, there's more downside to be expected. How are the most recent market movements playing into your bullish and bearish scenarios?

I'm not really into news as mostly news is already priced into the markets. We have seen a huge surge on the equity markets yesterday with the bill passing through. That's probably already priced in before it actually happened. What I want to see with the price right now is just that we reclaim a previous support level which is 6869. And until we don't do that, I expect further downside to come. It's just pure technical levels.

What is your take on Michael's analysis, Mati? What key levels are you looking at for bullish and bearish scenarios?

I would say 6800 is a key level that has played out before, but you always got to watch out for things like false breakouts and things which can happen. I would say overall, I mean we're looking at very wide range for bitcoin, something between $3,120,000 per coin. So please employ things like dollar cost averaging and buy the dip, such as I'm doing in my public portfolio continuing.

To look at the more short term scenarios. Michael, you tweeted that the US stock markets are currently in a relief or or dead cat bounce during a massive, massive downtrend. Both you and Matty have pointed out how bitcoin has recently been correlated with equities markets. Do you also believe bitcoin is experiencing a brief dead cat bounce as part of a larger downward trend?

I guess it's a little bit difficult for Bitcoin to state it's dead cat bound. I still believe that Bitcoin has some sort of accumulation period to come in the Next few months, especially given the uncertainties on the equity markets. You see it on all the markets. You see the equity markets bounce up pretty strong yesterday. You see gold and silver bounce up with tens of percents. But there's no real shift in momentum at this point. The first panic just occurred about the coronavirus and there's still much more panic to come, I assume. So I expect the bitcoin markets to just accumulate while the stock markets continue to fall down in the next months, given the economic impact of the coronavirus as well.

Do you share that same view, Matti?

Yeah. So in times of crisis, all correlations go to one. Meaning at the moment, what we've seen, the initial impact and the shock of the coronavirus is that people are moving to cash at an unprecedented level, meaning that they're selling off every asset that has a value. And that includes gold and silver, copper stocks, of course, and bitcoin. Now, especially since Wall street and institutional players are quite new in the market. I mean, most of them joined really during the early 2019 rally. They were kind of like the first money, the weak hands in the market. And a lot of them are the first ones to go out when things falling. That said, the correlation between bitcoin and the stock market right now is at a record high. It reached 0.6 out of 1, which is. It's never done that before. So at some point that correlation has got to come down. It can't last forever. And we will see a decoupling. What the United States government announced yesterday is nothing short of helicopter money and universal banks basic income. Over time anyways, we'll definitely see people starting to hold on to any kind of assets that have by nature a limited supply.

So continuing with this inflation, the Fed was recently given the green light to print as much money as needed to stabilize the economy. Matti, you took to Twitter to call this quantitative easing to infinity. Michael, you say long term more dollars being created is bullish for bitcoin and commodities. You are both referring to the effects of quantitative easing. How central banks are purposefully inflating their economies to offset the financial crisis. Why is this bullish for bitcoin? Michael?

Well, what Matti just said about helicopter money and inflation, in the end, people will seek to. People will search for assets that remain their value instead in markets that are pretty inflated. So what you want to see at some point is that investors run out of the dollar given the inflation or deflation, and start to seek for other assets which are commodities like gold, silver and platinum and bitcoin the other scenario is that the crisis just continues to fall down until 2021 and 2022 and the equity markets bottom out, after which the other commodity markets and bitcoin start to outperform the equity markets in the first case, which we have seen in 09 to 2011 with gold. So in the end, quantitative easing, I expect that to be bullish for bitcoin.

When can we expect bitcoin to kind of fulfill its, its destiny? As you were talking about, Matti, what, what are the exact circumstances that you see occurring when bitcoin can finally come into the role that was meant for it?

Unfortunately, past performance is not an indication of future results. But if we look at the 2008 financial crisis, we know that during 2008, when this stuff was hitting the fan and people were exiting stocks as fast as they could, gold was going down as well. And this is very similar to what we're seeing today. Simply, everybody's kind of moving to cash as the number one, not necessarily just cash as anything that's liquid. Liquidity reigns supreme in this scenario. So everybody wants something that they can hold on to that's liquid. If you look at the aftermath to the financial crisis was, I believe, as Michael said, 2009 to 2011 to 2012, that's when gold really took the center stage. It was multi years. It went from around $800 after the crisis and it shot up to $2,000 per ounce by 2011, 2012. It was in response to quantitative easing, where people were afraid that quantitative easing would bring inflation in the end. In the end, it didn't end up happening that quantitative easing brought inflation. However, they've been printing money pretty much constantly ever since then. And the amounts that they're talking about now far surpass anything we've ever seen before. Which means that basically inflation is pretty much foregone conclusion at this point. Even if, even if we haven't seen, seen it in the past, at some point you just, you put money in, more and more money in people's pockets. The number, you know, the number of work hours are going down within the economy, the number of goods within the economy are going down. That all adds up to us to a very clear picture of where we're headed here.

So what you're saying is you kind of, you're using gold as an example for what? For how bitcoin could behave in the near future?

I think that both, yes, and I think that gold again, is already showing us incredible resilience since the beginning of the year. I'm not going to say if it went up or down during the crisis because it's kind of been fluctuating. But it certainly hasn't taken a hit like the stocks have. It's more or less held its value over that time. And I believe that bitcoin will also be seen as this type of asset. The first, the first thing to happen to bitcoin was that the weak hands left, which they often do when the going gets tough in bitcoin. But the Hodlers remained, and I believe that they are increasing their positions as we speak.

Michael, what's your view on this comparison with gold? Do you agree with Matty's perspective?

Yeah, it's. I mean, bitcoin is actually called digital gold, and it's even. It's acting in the same way as gold used to be in the past. However, it's easier to transfer bitcoin than gold. So I expect bitcoin to behave the same as gold used to be after 2000 crisis as it also dropped down during the 2000.com bubble. It dropped down in the 2008 credit crisis. So I expect the same to happen to bitcoin and crypto as it used to happen to gold and commodities. So either way, even if there has to be a decoupling, people has to have to fly out of the dollar. That's one way. The other way is that the equity market just bottom out out of this recession or crisis or whatever it's going to be and start to outperform the years after. That's the main two scenarios that I'm watching for Bitcoin as well.

A draft of the US Coronavirus stimulus bill proposed the creation of digital wallets to administer a universal basic income for adults earning under $75,000 a year. Although this provision was removed in the most recent draft, members of the House and the Senate are fighting for the implementation of digital dollars. Michael, you tweeted that the US Announcing a digital dollar doesn't change much. A digital US Dollar is still. Is still a US Dollar. Why is Congress suddenly considering a digital dollar? And what does this mean for crypto? And why don't you think this changes anything?

What it means for crypto is it raised awareness through that it's probably a blockchain application and it's built on blockchain. So it's. In the end we will go to a digital future in which just cash just goes away and everything goes to a digital platform so that it is bullish for crypto and awareness for crypto and Bitcoin in general, however, it's still a dollar and it's still infinite quantitative easing. So that doesn't change anything. There's actually printed more money while bitcoin has their whole thing and the exact opposite of the, the currency, the dollar. So I think in the long term it's bullish for bitcoin. For short term, okay, it's, it's still acting the same as the equity markets, I assume. So I guess they need to have one opportunity to do the helicopter money. And this is one way of doing it and the easiest way for the Congress to fulfill that prophecy.

What are your thoughts on this, on this proposal? Matty?

It was kind of a off the wall, wacky proposal, wasn't it? The fact that somebody in the US Government is pushing for it is quite interesting. And we've seen former CFTC Chairman Giancarlo, he's basically quit his job and he's lobbying specifically only for this digital dollar. And I think that a digital dollar would be first of all good for the United States because they'd be able to have a much greater level of control over their currency. Obviously, when you have bills that are floating around, you can't always track them, you can't always know where they are and what they're doing. So people are holding them in a safe or they're destroyed. You don't really know. Or maybe people are spending them. So when you have a digital dollar, you have a very good level of control over the velocity of money, over the creation of money, and a very good oversight of what's happening within your economy. It would be good for Bitcoin, of course, because it advances the entire idea of the Internet of value, where we have something, where we have dollars that are native to the Internet, that are floating around. That only increases awareness and usage of digital currency, which is going to be good for Bitcoin, because Bitcoin is the original digital currency and far preferred if you look at it on paper, as far as, you know, supply and inflation and hard money and everything like that. That said, I believe that it's not really in Congress's authority to create a digital dollar. I believe that really goes with the Federal Reserve. And they don't seem to be any in any rush to do this.

It was kind of a sudden thing. But do you think this is an opportune moment for the creation of a digital dollar?

No, I think that they've got far bigger things on the fact that it made it into that proposal at all. I think that we just Chucked that up to ridiculousness of Congress and everybody trying to push their agenda. I don't think that that was something that there's really bipartisan support for, otherwise it would have actually made it into the bill. So I don't know. I think people just have their hands full with this coronavirus and maybe once the dust settles, that'll be put on the agenda, but for now it's nowhere near it.

The Quantum Economics website advises people not to hold cash in the current economic environment, if you're not investing, you're losing money. For many, the onset of a financial crisis can seem a risky and daunting time to start investing, especially if they have a small budget. Why is it important to be investing in trading at this point in time, even though it looks like we are headed toward a recession if we're not already in one?

So simply, like I mentioned before, everything that we've seen so far from this crisis is the initial shock and impact. So imagine the economy as a car that was zooming along at 110 miles an hour and all of a sudden is stopped. Whether it was in a car crash or somebody slammed on the brakes, we'll leave that part of the analogy. But what's happening now is that the car is, is, has come to almost a complete stop, meaning that the global economy is not moving. And the idea of cash is going to be something that you just don't want to hold on to because it will lose its value. It's been happening, it's been playing out when I wrote those words before the Corona crisis, but I believe that that's going to be far accelerated now. And if you're on an extremely small budget, I would say it doesn't really matter all that much if you're going to be holding cash. If you're living paycheck to paycheck, then you don't really have much to invest with anyways. I wouldn't say to start trying. That's not necessarily always the, the, the brightest move because if you need that money for there, you know, this is an old idea in trading. If you need the money for something else, you know, food, education, clothing, rent, you, you definitely don't want to be trading with it. That's just a dangerous thing to do. But for anybody with a bit of an extra or disposable income or value that they want to store or they want to see it grow in the.

Future.

Cash has not been a good place for that, not since the 80s, and it won't be anytime soon. What with negative interest rates and everything like that, you're going to want to do everything you can to find things that are of value and going to continue to rise in value. Cash is just not a great place to store value from now on.

Michael, do you agree with this idea that if you're not investing, you're actually losing money?

I agree on some points right now. I mean, if the first shock on the equity markets has just occurred, if there's another second wave coming in through which the coronavirus will take the whole year, I expect the markets to just drop further down. But people have to realize that the coming years will give you opportunities you've been waiting for for the whole decade. So if you want to start investing and trading, then this is probably the period that you want to make some choices. That doesn't mean that you have to use all your money for it or that you have to invest everything at one point. Dollar cost averaging is a pretty decent way of investing in this period as it's just giving you opportunities you've been waiting for. It's the same as people who joined crypto in 2017. They wanted to buy a 3K, but then they didn't have any money to buy Bitcoin at 3k because they bought at 18k. So if you are patient in this market and just dollar cost average, you get opportunities you've been waiting for for years. And I guess that's, that's tremendous. And one day the people will leave the dollar for other commodities or other assets and that period will come in the next year. So, yeah, I agree on some point, but short term, it's a little bit, a little bit too volatile and uncertain to invest.

I assume what is one suggestion you would give our viewers to protect themselves against the current downward trends in the market?

At this point, I'll just stay in cash and be really patient. I mean, Trump just announced that they want to open up the country at Easter while other countries are in lockdown for three months. So that's an interesting approach, I assume, and we have to see how that just works out. I mean, if the whole country of the States just still has to get the first shockwave of coronavirus, then this whole impact will just be bigger. So remaining patient is not a bad approach at this point. After that, I'll be most bullish on crypto and commodities in general, not particularly on equities.

I'm going to, I'm going to disagree with you on that one. The Fed just announced that they're willing to buy the entire market.

There's enough cash in the financial system and there is an infinite amount of cash at the Federal Reserve. We will do whatever we need to do to make sure that there's enough cash in the banking system.

Like quite honestly, QE Infinity is okay. If you're willing to sell it, we're willing to buy it. And this came at a time when there were literally no buyers in the market for many assets. Mortgage backed securities was just a sea of selling. I've been getting alerts flashing for several days that there just simply are no buyers out there for them. And the Fed also announced that they're going into corporate bonds, which are not exactly stocks, but basically they're going to be holding up the value of companies directly now as well. With that, basically and you know, along with the fiscal stimulus package of $2 trillion, I believe that they very well could have put a limit on the downside of this market. And anybody who's not investing right now and sitting on cash on the sideline is probably going to be missing out on a massive upswing.

Great. Thank you, Matty and Michael for joining me today. It was a pleasure having you on the show.

Thanks a lot for having us.

Thanks a lot.

Thank you everyone for watching. My name is Jackson. That was Mati Greenspan and Michael Van der Po Pop. And guys, if you like the video, hit that like button and subscribe. And don't forget to hodl Cointelegraph like subscribe and Hodle.