Why the Fall Season Will Be a Great Indicator of Correction

Bitcoin (BTC-USD exchange rate) prices dropped sharply in Friday’s trading session, triggered by Mt. Gox Starts Refunding Customers, which has sparked fears of a potential sell-off in cryptocurrency markets. Token Bay Capital Founder and Managing Partner Lucy Gazmararian offers her insights into the cryptocurrency outlook.

Gazmararian notes that the Mt. Gox redemption event was “pretty closely tracked in Bitcoin circles” and was widely “anticipated.” He suggests that “any sale [in bitcoin] It’s likely to happen in stages” rather than all at once. He also questions whether significant sell-offs will materialize, saying that “people are likely to hold bitcoin for the long term.”

Going into the summer season, Gazmararian predicts a “quieter” trading period, especially for bitcoin. However, he stresses that the real test is yet to come: “The big question is what bitcoin will do when everyone goes back to work in the fall and the markets start to recover. That’s when we can really tell whether bitcoin will have a deeper correction than what’s actually typical for most of the cycle.”

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This post was written by Angel Smith

Video Transcription

Bitcoin’s value plummets after Mount Gox begins refunding users, fueling fears that customers may quickly sell the coin to argue about what investors should do.

Now we have Lucy Gas Marian, founder and managing partner of Token Bay Capital.

Lucia.

It’s nice to have you here.

Thank you for discussing this topic with us.

I mean, what should we expect some of the holders or holders to do now as a result of Mt. Gox?

So, Mount Gox has obviously been monitored, um, pretty thoroughly in Bitcoin circles, so it’s an expected event.

And then there was also a lot of negotiation of claims before, you know, all of this was resolved on behalf of the creditors.

So, it is really a matter of debate whether 9 billion will flow into the markets at once, but in reality it is highly unlikely.

So any sales are likely to be staggered over time.

And indeed, one has to wonder whether there will be any sellers because, as I said, it is likely that a lot of the demand has already changed hands and people are already willing to hold Bitcoin long-term or sell it, but it is unlikely that this will happen all at once.

So it should be available and the market should be able to absorb any supply that comes in.

Lucia.

The story continues

There’s a lot, I see a lot of chatter on various forums, on various forums dedicated to cryptocurrencies.

Very focused on what’s going to happen with this presidential election.

Let’s make a comparison: Suppose President Biden decides to retire and someone else steps up and takes his place.

Who is the best person for the cryptocurrency market?

The interesting thing is that there are a lot more pro-crypto voices in Congress in US politics and, you know, we’re getting a lot more supporters and that’s largely due to this stance on the cryptocurrency movement and the funding that they’re actually getting from a concerted effort by all the big players in the cryptocurrency space to really change the perception around cryptocurrency, really get people on board with the new technology and, you know, the infrastructure for a new generation of financial markets and, you know, for politicians to see it as such and actually see it as an enabler and a way for the US economy to move forward and grow.

And so I think they’re having incredible success in that sense this year.

There’s a lot of funding coming in and a lot more voices, and it’s not just funding, it’s education, with all these crypto groups going to Washington and explaining and sitting down with legislators to determine what this technology can really offer the American people.

Even in the first half of this year, the cryptocurrency strategy was pretty simple.

It was about approvals and having, what does the second half strategy look like for cryptocurrencies?

So I think, okay, we’ve seen a bit of a sell-off lately.

I think with each wave we get new buyers who are not used to this volatility.

So it’s not a particularly pleasant experience to invest in an ETF in January, be excited about 30% or 50% gains and then find yourself down 30%, it takes a little getting used to.

So we have new buyers entering this market.

And then, generally, during the summer the trading is calmer, right?

Summer is a quieter time for trading, and Bitcoin is no exception, especially now that it is listed on a national stock exchange.

So there will be some degree of correlation.

The big question is what will happen to Bitcoin when everyone goes back to work in the fall and the markets start to recover.

This is when we can really tell whether Bitcoin will undergo a deeper correction than is typical for most of the cycle.

And up to this point, we are still seeing very typical movements in the price of Bitcoin.

If someone wanted to use this pullback, Lucy, as a buying opportunity, what should be their first stop?

Um, so, it changes every time they go down.

So there were 56.

Now people say 48.

Listen, I think a great piece of investing advice, although I can’t give it, is to look at the dollar cost.

To average out your entry into this asset class, you need to have a long-term view on Bitcoin.

We need to look at the fundamentals.

If you invest for six months or a year, this will be a rather complicated trading strategy because the market goes through cycles of expansion and contraction.

So the best thing to do with Bitcoin is to invest in dollars and hold it for the long term, because we are likely to see another cycle towards the end of 2025 and into 2026, when we will have another cycle where these cycles will really emerge from this Bitcoin mining and the Bitcoin halving, which happens every four years.

So I think as investors you should really take a close look at Bitcoin.

Do you think it will become a fundamental trading tool?

Do you think it will be the equivalent of the US dollar in a global digital economy?

Do you think more emerging markets and governments will start accumulating Bitcoin as a reserve asset?

You know, consider what you think the utility of Bitcoin really is because there are a lot of different stories associated with Bitcoin and, you know, you just buy it because you think it’s going to go up.

I would suggest having a long-term investment horizon.

Lucy Gas Marian, founder and managing partner of Token Bay Capital.

A thousand thanks.

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