Crypto analyst Cole Garner says the global economy is likely nowhere near hitting a bottom, and Bitcoin (BTC), Ethereum (ETH) and the wider crypto markets will be hit hard.
In a massive tweetstorm, Garner cites billionaire hedge fund manager Ray Dalio to paint a picture on where the global economy is headed. In a recent Ted Connects talk, Dalio predicted the world is hurdling toward a depression, similar to that of the 1930s that will entail years of recovery and require restructuring of financial systems. Says Dalio,
“Just so we are clear: A recession usually leads to a 30% to 40% fall in equities, a big recession usually has a 40% to 60% fall and a depression is 60% to 80%. We haven’t even priced in a recession yet. There is a long way to go.”
Garner says he surveyed 12 of the analysts he respects most for their take on where the S&P 500 is heading. Those results show the bottom is far from in.
“There was wide variance — but the aggregate expectation was about 50% off all-time-highs.”
Garner expects BTC and all crytpocurrencies to remain highly correlated to traditional markets in the short term, and warns Bitcoin may plunge as low as $4,800.
He believes the big dip will present a prime opportunity to load up on BTC, citing recent data that indicates there are now more Bitcoin whales since December of 2017 and more stablecoins are being issued.
“If and when we leg down, risk-on assets like BTC probably sell off. Bitmex liquidation engine won’t make the same mistake twice. But Bitcoin could fill low orders. It’s bullish *big picture* — but a sweep of the lows could come first. If we leg down, I’m a buyer from $5,600 on down to $4.800…
I may load up on ETH too, as it nears transition to proof-of-stake. Yield-seeking ETH whales will lock up a lot of supply moving forward. Though not a fixed-supply asset, ETH may outperform BTC in the next bull market.”
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