Bitcoin to bottom at $11k, cryptos will still outperform stocks in coming recession - Hex founder Richard Heart
Bitcoin is down 65 percent from its all-time-high of $68,990. In June, it briefly dipped below $18,000, implying a 75 percent drop from its all-time-high.
Last year when he appeared on Kitco News, Hex founder Richard Heart predicted an 85 percent fall in the Bitcoin price.
“On my last appearance here, I said that Bitcoin was going down to $10K,” he stated. “So far, Bitcoin totally dropped 75 percent, 10 percent shy of my 85 percent target.”
Heart blamed institutions with large holdings in Bitcoin like Celsius, MicroStrategy, and Three Arrows Capital for taking leveraged positions in the cryptocurrency, leading to a bubble.
“Michael Saylor took on leverage and he’s down, I believe, 30 percent on his Bitcoin stack,” said Heart. “The Government of El Salvador is down, ARKK invest is down. Everybody’s wrecked, but me. I called the top on the deck.”
Heart spoke with David Lin, Anchor and Producer at Kitco News.
Bitcoin in a recession
The National Bureau of Economic Research has not officially declared that the U.S. is in a recession. However, Thursday’s data from the Commerce Department shows that the U.S. economy has experienced two quarters of negative GDP growth, the standard definition of a recession.
Recession risks are potentially heightened as the Federal Reserve raises interest rates.
Heart said that Bitcoin’s outlook is bearish during a recession.
“Bitcoin is directly correlated with the stock market,” he explained. “As interest rates rise, stocks go down. As stocks go down, Bitcoin goes down. When Bitcoin goes down, most other cryptocurrencies go down as well.”
However, Heart cautioned that relative prices matter.
“If the investment you have drops 20 percent, but all the stuff that you want to buy drops 20 percent, you broke even,” he affirmed. “So, all that matters is the ratio of what you’re holding versus the stuff you want to buy… I don’t care about GDP growth or ‘not growth.’ How does that affect me? I care about Ferrari prices, Rolex prices. I don’t know what a gallon of milk costs. I’m too rich to care anymore.”
In a recent podcast, Heart called Bitcoin whales “centralized scumbags.” He used Grayscale’s Bitcoin trust as an example.
“Grayscale holds 3 percent of all the Bitcoin,” he said. “That is a centralized counterparty that can choose to just not pay you.”
He added that exchanges which trade Bitcoin are susceptible to hacking.
“The giant hacks come from stupid people who don’t know why crypto was invented, and put their coins in someone else’s wallet,” he explained.
Most crypto exchanges do not provide clients with custody over their own wallets, and simply hold a client’s coins in trust. This facilitates liquidity, but can put clients’ accounts at risk, since exchanges are susceptible to hacks and scams.
“Almost every exchange has been hacked at some point,” said Heart.
To find out Heart’s thoughts on Hex’s performance, and whether Bitcoin is an NSA creation, watch the above video.
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