What If You’re Wrong?

Last week, on the back of the Fed pausing interest rate hikes, we asked you, our readers, for your prediction on where BTC would be priced by year’s end.

Well, hundreds of you have spoken and the results are quite hopeful. 👇

Turns out not only do most of you think BTC will be $30k or higher by year end, but absolutely NONE of you think it will be below $15k.

Wisdom of the crowds? We hope so. But let’s play Devil’s Advocate for a second.

While we’ve been pounding the table on all the positive momentum occurring in crypto, including game changing accounting rules, major funds raising huge amounts of capital, and crypto scoring major wins against the SEC, we need to be intellectually honest and take a look at the risks.

Let’s start with the elephant in the room: Binance. According to a recent writeup from the WSJ, Binance is teetering on the edge of failure. The Journal pointed to the fact that the world’s largest crypto exchange (in just the last three months) has lost more than a dozen senior executives, laid off 1,500 employees, and seen revenues fall more than 70%.

To be fair, every exchange has run into difficulties in the past year on the back of reduced trading volumes, but Binance is also being sued by the SEC for operating an illegal exchange and mishandling user funds and is facing billions of dollars in fines.

There’s no other way to put it, a collapse of Binance would be FTX level catastrophic.

And that’s just in crypto.

On the other hand, we also got a drifting bond market, roughly $1.75 trillion of outstanding student loans accruing interest again, credit card & auto loan balances at all time highs, and the American debt load skyrocketing. And we don’t even have to get started on the corrupt and inept leadership in government.

While these fiat/macroeconomic factors might seem like they would bode well for crypto, so far that simply hasn’t been the case. In reality, it seems like crypto prices have simply followed money flows… and consumer spending is drifting away in the face of higher-for-longer interest rates.

Remember, in 2020, both equities and BTC fell in tandem as the Fed began raising rates. Right now it looks like the two assets are pretty correlated. So if there is a black swan event, crypto may just surprise you.

Now, we have no doubt in the future of BTC or crypto over the long run. But don’t be surprised if ineptitude, corruption, or targeted attacks don’t hurt prices in the short run.

So while most of you don’t think that the price of BTC will drop below $25,000 this year, you need to ask yourself, what if it does?

Will you hold on tight, or sell with fear? Let us know.