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Gareth Soloway, President and CFO of InTheMoneyStocks.com, joins Yahoo Finance Live to discuss developments in the crypto market and the meme market frenzy.
Video transcript
ALEXIS CHRISTOFOROUS: I want to go back to Bitcoin now, because investors, as we know, threw Bitcoin in droves. The latest figures from Coinbase reveal that $ 141 million was withdrawn from Bitcoin investment products in the most recent week. And we know that the price of Bitcoin has been more than halved. It peaked at around $ 64,000 earlier this year.
Now some analysts say it could reach $ 20,000 in the not too distant future. In the meantime, Ether has become the digital currency of choice for investors, at least for now. Here to talk about it, Gareth Soloway, President and CFO of InTheMoneyStocks.com. Gareth, good to have you here. First, let’s just break down why investors suddenly got sour on Bitcoin. Are there any technical issues involved here? Or is there any news leading this?
GARETH SOLOWAY: There is definitely some news. So you have the crackdown in China on cryptocurrencies, because China somehow wants to shift the future from reserve currency to the digital yuan. So they obviously don’t want Bitcoin to take over. And then you also have some fundamental issues with a crowded trade as it traded close to $ 65,000.
And then I think the recent drop – it’s amazing to see it in terms of memes stocks and how cryptocurrencies have gone down one leg here, just as the flow of money has gone from there. them to those stocks of memes. And I’m guessing Bitcoin sees a bit more upside in the next week or two, as those meme stocks can stagnate. But it’s a fascinating spin of capital back and forth from crypto, to meme, back to crypto, and so on.
KRISTIN MYERS: So Gareth, curious if you see some of these declines here as buying opportunities – a place to really get into Bitcoin, for example. Or do you think people should wait a bit until lower levels can appear?
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GARETH SOLOWAY: So that’s a fantastic question. And it really is a matter of time. Again, I would expect Bitcoin to go back to the mid 40’s to hit a range of $ 50,000 in the short term. But at the end of the day, you still have to see a bitcoin wash where everyone panics and throws the baby out with the bathwater type mentality.
So again if you are a short term investor I think there is an advantage here. I think, again, yesterday you had that drop to $ 31,000, but that never made the low of $ 30,000 go. This is the level on a technical basis that you want to follow. If he takes away $ 30,000, it will drop to $ 25,000 and $ 20,000. As long as he holds $ 30,000, he could trade here in the short term before another sharp drop
KRISTIN MYERS: Alexis, I don’t know if we might not be hearing you right now, but I have another one.
ALEXIS CHRISTOFOROUS: OK, I’m back.
GARETH SOLOWAY: I thought I shocked you so much with my …
ALEXIS CHRISTOFOROUS: That’s what happens when you have to clear your throat and you mute yourself while streaming from home. I know we’ve all been there. So I’m back and I have a question for you. El Salvador chose Bitcoin as its first currency, to be the first cryptocurrency to be legal tender. What does this do for the legitimacy of Bitcoin? And are you surprised that we don’t even see a bigger hike here after an announcement like this?
GARETH SOLOWAY: I’m not very surprised, mainly because El Salvador is not a major country when it comes to money going into Bitcoin. If you saw this announcement from the countries of the European Union, the United Kingdom, the United States or China, it would be heartbreaking. But again, when you talk about these small countries, it won’t have the monetary impact that investors are hoping for.
Now, is this a step in the right direction? Yes. Do I think that tells us that years later you will see more adoption? Absolutely. So again, I’m a huge long-term bull in Bitcoin. I just sit patiently waiting for this bigger chase to start piling up.
KRISTIN MYERS: So Gareth, I want to know here if you think there are just broader ripple effects of some speculation and some gambling that we’re seeing in the markets right now. A few moments ago, Emily was pointing out how some of these Reddit traders are stacking up in some of these stocks.
You know, Avlon Medical is up 350% right now. He ran in just 24 hours. Are there broader impacts on the markets as a whole, given that this type of trading behavior is underway right now?
GARETH SOLOWAY: Yes, there are certainly broader implications. I think in the short term it is positive. But that’s a very limited positive. So you have investors making a lot of money in the short term here. They can go out and spend more money, which has a stimulating effect on the economy.
But if you look at something like an AMC, I remember when it traded 750 billion shares last week. The average admission price was $ 65. And these traders are already falling on the stock. So I think it’s more negative than positive in the long run here, as these stocks are starting to hit more realistic levels.
So I would care. I think, again, this mimics the return to the bubble. It mimics the things we saw in the real estate crash – or before the 2007 real estate crash. And as an economist and longer term trader, it’s something I have on my radar that makes me feel better. cautious in this market – – select my long positions very carefully and reduce the size of my share.
ALEXIS CHRISTOFOROUS: All right, Gareth Soloway from InTheMoneyStocks.com, thank you for being with us today.
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