The recent sell-off starting in May initially turned into a massive crypto crash. Bitcoin is currently 50% down from its all-time high while altcoins are pretty much the same. So far, the market has shown little attempt for a recovery and remains overall bearish. However, Michael Sonnenshein, the CEO of investing giant Grayscale states that investors see the latest correction as more of an opportunity. While Bitcoin has consistently followed the stock market, Sonnenshein still argues BTC can be a haven asset like gold. Tell us what you think about the latest crypto crash down in the comments.
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Viva La Crypto Crash
As the CEO of a company who sells Bitcoin to the ultra-wealthy, Sonnenshein told Yahoo Finance in a recent interview that the latest crypto crash is an opportunity. Or at least that is how the investors see it. He failed to mention how the majority of retail investors are still underwater. Furthermore, he also did not mention how could a retail investor who is underwater can see the Bitcoin sell-off as an opportunity. Sufficed to say, Sonnenshein used the term looking at the broader markets which means he could basically state whatever that comes to mind without needing for justification.
“I think we have to examine crypto in the context of what’s been happening in the broader markets. You’ve seen rising rates in the US [which] has caused a lot of volatility in a lot of different asset classes, crypto along with it.
The recent sell-off though, from what we’re hearing from investors, has not deterred them. If anything, they’re looking at it opportunistically and a pullback like this is nothing new in the crypto space.”
Furthermore, the CEO of the company who has the largest Bitcoin fund worth over $43 billion in crypto said that comparing BTC to traditional assets is tricky and not quite right.
“Our standpoint on this is largely when you’re looking at something like Bitcoin, you’re looking at something that for us really does look, feel and act like a digital gold.
If you look out over a longer time horizon, you will see crypto being uncorrelated to other asset classes, although oftentimes it is scrutinized because we do only have the last 10-plus years of trading history to really examine.”
Regulations
Sonnenshein said that he is hoping for clear regulatory guidelines that could provide growth. In that regard, proper regulations can initially speed up industry innovation.
“We’re spending a lot of time in DC and that’s also a reason that the Grayscale team is here in Davos. Regulation around crypto and the entire ecosystem is paramount.
One thing that we really would like to see on the heels of the White House executive order, what you’ve seen out of the UK government, what you’ve seen in Germany recently. A lot of governments are moving their policies and procedures forward and we’d like the US to do the same thing here.
We need to see regulation beyond just enforcement so that we have the proper regulatory frameworks to foster the innovation, to create job growth, to create products and services, to ensure that the innovation around this technology remains in the US, and we don’t lose our competitive advantage there.”
In the meantime, European Central Bank (ECB) President Christine Lagarde has officially gone on the record to say that cryptocurrencies are worth zero. With that, one can only expect brutal regulations coming out of the EU.
“I have said all along the crypto assets are highly speculative, very risky assets. My very humble assessment is that it is worth nothing. It is based on nothing, there is no underlying assets to act as an anchor of safety.” Said Lagarde.
And here we are, in a time when large institutions offer an exaggerated image of reality. All while regulators have waged war against cryptocurrencies. Perhaps, the truth is somewhere in the middle. But, the synthesis of such clash will only harm the individual investors.
