CoinDesk Learn Editor Ollie Leech breaks down the latest in bitcoin and other crptocurrency related topics.
Video Transcript
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– Let’s take a look at Bitcoin, because we’re seeing some resistance around 50,000. It briefly traded above that level but hasn’t since been able to break back above it. So we want to talk about all this with Ollie Leech. He’s CoinDesk’s Learn Editor. And Ollie, we can’t seem to hold above 50,000. Today, we’re trading just around– what is that– 48,000, just below 49,000. Why are we seeing resistance at this level?
OLLIE LEECH: Yeah, we seem to have hit a wall at that sort of big psychological level. There’s been some overbought signals on Bitcoin’s price chart, some profit-taking in the Asian trading session, and there’s also been a notable spike in exchange inflows over the last week. So we’ve seen almost 30,000 Bitcoin move to exchange wallets, which is typically bearish. You know, it’s a sign the investors are looking to sell that Bitcoin in exchanges. We’ve also seen whales, interestingly, reduce their Bitcoin holdings over the last week. And also, there’s actually a 14% discount on Grayscale’s Bitcoin Trust, so there’s a bit of a low demand right now.
Could be traders are hesitant as Bitcoin kind of looms around that 50k mark. There’s usually an expectation of people selling. It could just be a temporary pause in the uptrend. There’s actually a few positive things coming out this week. We’ve seen MicroStrategy, for example, buy $177 million more Bitcoin. So there are a few things to help it on. We’re just waiting to see what happens.
– Ollie, is there a way– and this question may betray my ignorance of Bitcoin trading– but is there a way to figure out if we’re seeing just one large block of movement into those wallets, or is that something that’s not data recoverable?
OLLIE LEECH: Yeah, so with the on-chain data, there’s absolutely tons of metrics. But what you can look at is the number of Bitcoin, the supply of Bitcoin that is moving between wallets that have between 1,000 and 100,000 BTC. So these are the main whales that we’re looking at. And that gives us an idea.
If we can see the supply moving into whales, we’re seeing them accumulate. If we’re seeing it leave, then, obviously, they’re starting to sell on exchanges, or starting to move that around, it’s usually a bearish signal.
– Ollie, overall, would you say the sentiment, though, around Bitcoin, has it improved? Has it significantly improved? I mean, how would you compare it to six or eight weeks ago?
OLLIE LEECH: Yeah, absolutely. I mean, we’ve kind of shaken off all of that Chinese mining FUD now. We’re starting to look really promising. That talk we had a few weeks– a few months ago, now– with Elon Musk, and Jack Dorsey, and those guys, that really started to help to move the market.
Sentiment is starting to improve, but we were doing really well, you know? We’re up quite a bit now since we hit. But as soon as we hit that 50k mark, that was when everything started to unravel. There was a little bit of uncertainty and, like I said, you know, people just kind of waiting to see what happens at this stage. And I think if we can break above this, then I think, you know, there’s a case to be made that we’ll continue back towards its all-time high. If it crashes beneath this, then we may still see some more, sort of, lower trading bearishness.
– And the movement we’re watching, is it the whales who are moving, or is it smaller than that? Because you said that would be a bearish indicator.
OLLIE LEECH: Yeah, a lot of the institutions who sort of drive the main trends that we’re seeing now, I mean, there’s a few positive indications that things are starting to pick up. But if you’re looking at the on-chain stuff and we’re seeing money move out of these sort of whale wallets, we’re seeing them move to exchange wallets, which usually suggests that, like I said, they’re starting to sell on these exchanges. There’s a lack of confidence in the market.
So these are the sort of things we usually look at. And it’s usually institutions that drive the main trend. Retail traders, particularly sort of speculative, jumping in on FUD and FOMO, they’ll be jumping in to kind of extend that rally, or they’ll also extend the downside rally.
– A couple of big companies, Ollie, moving into the NFT space. Visa was one of them. Budweiser also getting in on that.
And when you take a look, I guess, at the trends that we’ve been seeing over the last several days, it seems like the NFT space is back and even seeing a second wave. What do you think is driving some of this excitement?
OLLIE LEECH: It’s been a really interesting couple of weeks. And I think, like you said, Visa’s now bought its own cryptopunk. We’ve seen Budweiser jump in. And these are companies starting to use NFTs. They’re recognizing its potential as marketing tools.
We saw companies like Slim Jim and Snickers do this a couple of months back, but now, yeah, they’re really starting to take off again. I think GamyFi is really starting to help this NFT– this sort of second wave, like we said. And what this is basically is like the convergence of DeFi, NFTs, and gaming.
We’ve seen this with games like “Axie Infinity” and “Crypto Blade.” And what it basically is is it’s these gaming companies have cottoned on to using these NFTs and cryptocurrency, and they’re actually helping players earn money. It’s a pay-to-play– sorry, a play-to-earn model, where people have characters.
These characters are NFTs. You level them up. You can sell them on these marketplaces. You can earn actual cryptocurrency just for playing. And so it’s rewarding gamers with this kind of new model, and it’s also helping gaming companies.
We’ve seen a number of companies, before they’ve even developed the game, sell land and in-game items and things before the game has been developed to help kind of raise capital. So you know, it really has the potential to disrupt the gaming industry now. I can’t see why people would play for free when you can actually own cryptocurrency instead.
– What do you think? Do you personally– I don’t know if you’re allowed to share your personal opinion– but NFTs, I mean, for one of those, the Pet Rock NFTs, it was in excess of $600,000.
OLLIE LEECH: [LAUGHS]
– Is there a greater fool out there who’s going to pay more?
OLLIE LEECH: It’s just it comes down to what you perceive as value. I mean, the rock, yeah. I mean, you look at that, and it’s no Andy Warhol painting. But you know, it’s the same as anything, you know? Why is the Mona Lisa worth over $900 million, or why does anything have value?
And with these crypto punks, they have some innate value. These rocks, for example, it’s really what value people attribute to them. They’re scarce, so they have that kind of supply-demand thing that usually drives value.
It is kind of pushing the limits of what we perceive as value, which is an interesting kind of use case for what we think is valuable. Me personally, I’m not a big fan of the rock thing. I don’t really understand it. But then, we’re seeing these cryptic punks sell for over a million dollars, and these are just pixelated images of characters through an algorithm. So it’s challenging a lot of people’s views on finance.
– Ollie Leech, always great to speak with you. Thanks for taking the time. We’ll talk with you again next week. CoinDesk’s Learn Editor.
