Texas West Capital trader and crypto analyst Scott Melker, aka ‘The Wolf of All Streets’, has a grim prediction following Thursday’s bloodbath across the broader crypto market.
Bitcoin (BTC) hovered around $4,000 on Thursday, setting off a chain reaction that watched other digital currencies, including Ethereum, XRP and Litecoin, plummet. Despite a sizable uptick above $5,000, BTC has no signs of immediate recovery.
In a series of tweets, Melker warns the worst is yet to come amid a global market ripple effect induced by fears of the coronavirus.
“Thursday’s crypto crash exposed the massive dysfunction in what has been proven to be a very immature space. The fallout has not even begun – exchanges and projects will likely start disappearing in the near future.”
Last week’s crypto collapse, which mirrored the equities market, undercut a critical hypothesis – that cryptocurrencies would rise and shine amidst failures in the global financial system, providing an excellent escape hatch from the next big financial crisis. Instead, the coronavirus outbreak is proving just how much people value cash and toilet paper as they adjust their priorities, look for safe havens and trade money for staple goods.
While Melker expects global economic disruption to tear down the young crypto industry, he predicts that Bitcoin, the world’s first and largest cryptocurrency by market cap, will survive.
“Bitcoin will be fine. Crypto as an industry is somewhat screwed for the foreseeable future in my mind.
I’m not talking about the price of coins. People will continue to pump and dump them. Trading is fine.
The core premise of crypto is damaged.”
Melker also remains optimistic about Bitcoin’s underlying technology: blockchain. Various solutions that are based on the distributed ledger technology are allowing companies to execute smart contracts, transform supply chains, overhaul bureaucratic processes, authenticate documents and manage sensitive data.
“Blockchain is the future. The few great companies and projects should and will rise to the top.”
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