Bitcoin (BTC-USD) prices fell sharply in Friday’s trading session, triggered by Mt. Gox’s initiation of customer repayments, which has sparked fears of a potential sell-off in crypto markets. Token Bay Capital Founder and Managing Partner Lucy Gazmararian offers her insights on the outlook for the cryptocurrency.
Gazmararian notes that the Mt. Gox repayment event has been “tracked quite thoroughly in Bitcoin circles” and was largely “anticipated.” She suggests that “any selling [in bitcoin] is likely to be staggered” rather than occurring all at once. Moreover, she questions whether significant selling will materialize at all, stating, “people are likely to hold bitcoin for the longer term.”
Entering the summer season, Gazmararian predicts “a quieter” trading period, particularly for bitcoin. However, she emphasizes that the real test lies ahead: “The big question is what’s bitcoin going to do when everyone comes back to work in the fall, and the markets start picking up again. That’s really when we can actually tell if bitcoin’s going to be in a deeper correction than is actually typical for most of the cycle.”
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This post was written by Angel Smith
Video Transcript
Bitcoin sliding after Mount Gox begins repaying users, inflaming fears that customers might quickly sell the coin to discuss what investors should do.
Now, we’ve got Lucy Gas Marian who is the Token Bay capital founder and managing partner.
Lucy.
Great to have you here.
Thanks for joining us here on this topic.
I mean, what should we anticipate that some of the holders or holders may do as a result of Mount Gox now?
So um Mount Gox has obviously been tracked, um you know, pretty thoroughly in Bitcoin circles, so it’s an anticipated event.
Um And there’s also been a lot of trading of the claims prior to, you know, all of this being sorted out um on behalf of the creditors.
So, um it’s really up for debate as to whether 9 billion is going to sort of flow onto them markets in one go and it’s actually highly unlikely.
So any selling is likely to be staggered over a period of time.
And actually, there’s a question as to whether there will be any sellers because as I say, it’s likely that many of the claims have already traded hands and people already are either going to hold Bitcoin for the longer term or they’re going to sell, but it’s unlikely to happen all at once.
So it should be in and the market should be able to absorb any supply coming through.
Lucy.
There’s a lot, I, I see a lot of chatter on the, on the various boards on, on various crypto boards.
Very focused on what happens with this presidential election.
Let’s just handicap this, let’s say President Biden does decide to drop out someone else swoops in and takes his place.
Who’s the better person for the Cryptocurrency market?
What’s interesting is there are a lot more sort of pro crypto voices in Congress in us politics and, you know, we’re getting so many more cheerleaders and that’s largely driven by this stand with crypto movement and the funding that they’re actually getting from a co ordinated attempt by all the big players in the crypto industry to really change the perception around crypto, really get people for the new technology and you know, the infrastructure for a new generation of financial markets and for, you know, politicians to see it as such and actually see it as an enabler and a way for the American economy to sort of get ahead and grow.
And so I think they’re having amazing success this year in doing so.
Um there’s a lot of funding coming through and there’s a lot more voices and it’s not just the funding, but it’s the education as well, with all these crypto groups that are going to DC and really explaining and sitting down with lawmakers to set out what this technology really can offer American people coming into.
And even on the first half of this year, the crypto playbook was quite simple.
It was approvals and it was the having, what does the second half playbook look like for crypto?
So I think, OK, we’ve had a bit of a sell off recently.
I think with every wave that we have, we’ve got new buyers that are unused to this volatility.
So it’s not particularly nice experience to buy into the ETF in January, be really thrilled with 30% or 50% gains and then be down 30% you know, that takes some getting used to.
So we’ve got new buyers entering this market.
Um and trading over the summer is typically quieter, right?
You’ve got the quieter trading months over the summer and Bitcoin is no exception, particularly now that we have Bitcoin listed on a national stock exchange.
So there is going to be a degree of correlation there.
The big question is what’s Bitcoin going to do when everyone comes back to work in the fall and the markets start picking up again.
That’s really when we can actually tell if Bitcoin is going to be in a deeper correction than is actually typical for most of the cycle.
And to this point, we are still seeing very typical moves in Bitcoin’s price.
If someone wanted to use this pullback, Lucy as a buying opportunity, what should their first stop be?
Um So, well, it changes every time they break below.
So it was 56.
Now people are saying 48.
Um listen, I think a great investment advice, although I cannot give investment advice is to dollar cost.
Average your way into the asset class, you have to take a long term view on Bitcoin.
You have to look at the fundamentals.
If you’re investing for six months or a year, that’s going to be, you know, a pretty tricky trading strategy because the market goes through boom bust cycles.
So the best thing to do with Bitcoin is dollar cost in and hold it for the long term because we are likely to see another cycle down towards the end of 2025 into 2026 as we get another cycle when these cycles really arise out of this Bitcoin mining Bitcoin halving, which happens every four years.
So I think as investors, you should really take a view on Bitcoin.
Do you believe it’s going to be a fundamental trading tool?
Do you believe it’s going to be the equivalent of the US dollar in a global digital economy?
Do you think more emerging markets and governments are going to start stockpiling Bitcoin as a reserve asset?
You know, take a view on what you actually think the utility of Bitcoin is because there are many different narratives associated with Bitcoin and, you know, just buying it because you think it’s going to go up.
Um I would suggest having a longer term investment horizon.
Lucy Gas Marian, who is the Token Bay Capital founder and managing partner.
Thank you so much.
