Bitcoin (BTC) is down 65 percent from its all-time high of $68,990. In June, it briefly dropped below $18,000. That, in turn, marked a 75 percent drop from its all-time high. This has caused many analysts to comment on what will happen next. In this article, we will talk about Hex founder Richard Heart’s comments…
Hex founder made negative predictions for Bitcoin
Last year, Hex founder Richard Heart predicted an 85 percent drop in Bitcoin price. In an interview last year, he said that Bitcoin would drop to $10,000. So far, BTC has dropped 75 percent. That is, as little as 10 percent less than the expert’s 85 percent prediction. Heart accused institutions with large holdings in Bitcoin, such as Celsius, MicroStrategy, and Three Arrows Capital, of taking leveraged positions in the cryptocurrency. Their leveraged positions led to a bubble. Heart used the following statements:
Michael Saylor used leverage and I believe he saw a 30 percent drop in his Bitcoins. El Salvador’s Government fell, ARKK investment fell. Everyone is ruined but I… I searched for the hill on the deck.
Recession expectation in the market and BTC
The National Bureau of Economic Research has not officially declared that the US is in recession. However, data from the Commerce Department on Thursday show the U.S. economy has experienced two quarters of negative GDP growth, the standard definition of a recession. Recession risks potentially increase as the Federal Reserve raises interest rates. Heart said the outlook for Bitcoin during a recession is bearish. Heart used the following statements:
Bitcoin is directly related to the stock market. As interest rates rise, stocks fall. As stocks fall, Bitcoin falls. When Bitcoin falls, most other cryptocurrencies also fall.
But Heart cautioned that relative prices are important. According to Heart, if your investment drops 20 percent, but everything you want to buy falls 20 percent, you’re on par. So the only thing that matters is the ratio of what you have to what you want to buy…”
Risks of the cryptocurrency space
In a recent podcast, Heart called Bitcoin whales “central scumbags.” He used Grayscale’s Bitcoin trust fund as an example. “Grayscale holds 3 percent of all Bitcoin,” he said. “This is a central counterparty that can choose not to pay you,” he added. He added that exchanges trading Bitcoin are vulnerable to attack. “Giant hacks succeed because of stupid people who don’t know why crypto was invented and put their money in someone else’s wallet,” he said.
Most crypto exchanges do not provide custody to customers over their own wallets and only hold the customer’s funds. This facilitates liquidity, but can put clients’ accounts at risk as exchanges are prone to hacking and fraud. “Almost every exchange has been hacked at some point,” Heart said.
