# TOKEN2049 - Crypto Analysts: When Moon?

- Channel: [TOKEN2049](https://streameth.org/token2049)
- Date: 2019-10-09
- Watch: https://streameth.org/watch/yt-xNlYDxu6dek
- YouTube: https://www.youtube.com/watch?v=xNlYDxu6dek

## Transcript

so with us today we have two very bright minds in in the world of trading here in crypto space we have Mahatma horev and logic so how about you guys just introduce yourselves and tell us how you got into the crypto space and your financial experience sure so my name is Murad Mahmoud ah've recently started a crypto hedge fund adaptive capital I got into Bitcoin in 2013 sort of right before sort of the previous bubble lived in China at the time a lot of my friends were doing some sort of p2p trading some OTC trading back there so and I was sort of a part of that community and sort of kept track of this system ever since 2016 onwards in particular God after working on Wall Street for a little bit got more and more involved with with crypto and sort of the trading these markets watching these markets writing about the markets and essentially here we are today yeah I've seen some of your work it's actually really really good we're gonna get into some of that so my name is Arjun Balaji I'm an engineer by way of background and my trading is much more kind of quantitatively oriented and my big interests are in fundamental research and the things that I'm most interested in kind of teasing out you know over the last year and and right now especially as I think correlations will start to change over the over the next market cycle is in is in figuring out whether there are you know fundamental you know data points that we can you know tease out and whether we can take those factors and then derive kind of meaningful signal from them all right perfect and so you're more of a fundamental analyst and Mourad I'd say you're 50/50 is that about right that's about right all right and I'm more of a technical analyst not much of a fundamentals guy so this is gonna be a good little contrast so let's start with you know let's start with the broader market right let's start with a fundamental view how do you guys see well we'll talk about the price at the end right but what are you guys are seeing like fundamentally within the crypto space and how has it evolved over the last let's say nine months or so like once people started to realize that the bear market is here I mean some people are still in denial but I'd say about nine months ago any analyst and trader you know worth a damn realized we're in a bear market so what have you seen and how has it been evolving from a fundamental perspective let's start with you Arjun sure so I think that the the sort of lagging indicator in all this has been actually the valuations for a number of different projects that are totally you know that haven't even been launched yet publicly that are still private I think that nine months ago valuations were still you know they were trending upwards like it was the you know 2017 bubble and everybody was anticipating that these projects would come to market that they would bring kind of new liquidity with with that with these launches and I think that that's really changed substantially now you see projects that are you know choosing not to launch or you see projects that are you know very anticipated coming to market and you know getting a less favorable reception than anticipated I think that that's that's that's the biggest Delta that I've seen right now I think a lot of people are still you know somewhat hungover but a lot of the valuations private leave it at least adjusted to account for this I think that that's what that's a kind of big thing that we're seeing that the the big difference has been primarily in and launch decisions is what I'm saying right and before you answer Murad also think about I mean you're starting your fund so you've been talking to a lot of people probably globally not just New York I've been hearing for five years institutional money's coming institutional money is coming in other than a couple you know notable people like Novogratz I haven't seen any institutional money come in what about you it's gonna take some time I still think the next couple of cycles are going to be predominantly retail driven still I do think the share of institutional involvement will keep increasing sort of cycle to cycle and hopefully the average IQ of the space hopefully will be increasing with it and so we will see sort of the very very small number of legitimate projects in the space continue growing in value while sort of the tail end of the other 98% sort of hopefully dwindle down that's sort of the best-case scenario that I see probably will not come to fruition for another cycle or two unfortunately but a boy can dream yeah and and I think for what it's worth it's worth noting that you know at the at the depressed the prices that you know we saw last year a lot of real institutional money did come in right we saw andreessen horowitz launch a 300 million dollar fund committed to you know investing in just the crypto investing in crypto currencies you know paradigm raised five hundred million dollars including you know they had endowments and pension funds Morgan Creek digital raised fund with institutional help ease so I think that there is significant capital that is coming in because at these prices it makes it much more attractive than trying to you know deploy an LP investment at 17,000 Bitcoin yeah well my question that becomes where are they trading it right because volume on regulated exchanges like Gemini is non-existent yeah and I I mean they could be going OTC but those are more investment and position trades certainly not swing trades because they're not gonna trade on these unregulated institutions that everyone is accusing of you know front-running their clients and manipulating the price right regulatory perspective a big fund would never trade there yeah so like what do you think they're actually doing other than buy an OTC and hoping the price goes up yeah and III think that's exactly what is happening right because a lot of these funds are operated you know their their orientation is much more Silicon Valley oriented than you know from Wall Street or traditional capital markets so a lot of these funds you know they are looking at this thing across you know multi-year or kind of a much longer cycle and instead of actively trading positions a lot of them are you know looking for you know mispriced or kind of distressed assets right that we're in the ecosystem and and trying to buy and hold them through the next cycle there's a there's a joke in the community which goes something like the the Yale investment company is probably not going to be bidding up your utility talking on by Nance so they're you right exactly so what let's talk about other cryptocurrencies right so those of you that are familiar with my work I'm Tom bass by the way I have a YouTube channel about trading investing so I I'm not a fan of all of these old coins I just don't think they're fundamentally sound and I know it sounds weird to a lot of people but I come from the traditional trading environment and for me any company in the SMP 500 is fundamentally sound any company in the Nasdaq 100 fundamentally sound I trade them well more so in the past and now but I would just trade them like I don't have to worry about the company because they wouldn't have made it that far sure there was exceptions I was working at Bear Sterns when it went down and then there's the Enron's everyone loves to point out you know this one company out of a hundred that happens to you know do something malicious or ends up you know cooking their books and go down but to me you have a large amount of companies you can trade they're fundamentally sound and then you have penny stocks and I was never a penny stock trader even though I've met people that made a lot good money in penny stocks I think there was like I I looked at the 2017 rankings which stocks made the most money in 2017 and it was five penny stocks they made like seven hundred percent six hundred percent in a year but I never cared to trade those because those I don't know those companies they're not fundamentally sound to me so I haven't seen in this space to me it's the same way and Bitcoin is to me is investment grade sometimes I don't like a bad like hey if I offered you $10,000 would you take it in Bitcoin or in any old coin of your choice but you can't touch it for ten years and I'll give you double I'll give you twenty thousand and any old coin or ten thousand US dollars worth in Bitcoin which would you choose you can't touch it for ten years almost everybody chooses Bitcoin right but yet but everyone says others will survive so to me bitcoin is investable for the long term and everything else it's fun to trade if that's what you want to do if you want to trade penny stocks go trade penny stocks what are your thoughts on that about fundamentals versus just trading of all of these crypto assets and how different is Bitcoin from everything else yes so I guess one of the biggest questions in the space that everybody wants to have a clear answer to is whether the store of value market or the cryptocurrency market in particular is going to be like winner-take-all or winner take most and I guess depending on your view with regards to the answer to this question you might be interested in investing in also or not I don't know like I have become a little bit less ultra maximalist ik I think it could be completely want to take all but I think we are only one decade into what will probably be a century long paradigm shift and I think for the time being I don't think bitcoin is gonna take like 99% of the market I think it might take 70 to 80 percent but what I see and I sort of agree more with Andreas Antonopoulos on this issue I see more of like a peridot distribution with the or for our relatively sizable chains surviving for the time being I think we're so very early on in the space the market is very young immature inefficient there's still a lot of uncertainties and anxieties ahead and I see a couple of other out surviving and even thriving for sure I mean the way that I see it is it's kind of like the the Ronnie Coleman quote right everybody wants to be a bodybuilder nobody wants to build it nobody wants to lift the goddam weight right everybody wants to make you know significant venture scale returns in this space but you know to do that you have to take on some sort of risk exposure right and I think that it's you reasonably well understood what a lot of the risks are right you know there's a in many cases of legal and regulatory risks there's technical risk in many cases in many cases you have projects that are working on something they you know might have the sort of regulatory clearance and everything might be good to go but you know there's product market fit right they don't they're not building something that people actually want so there are all sorts of risks I think involved here that said you know I don't see it I see it a little bit differently it's kind of you know even in equity markets you have all kinds of you know the they're not all equity markets are the same right you have you in in the in the early part of any sort of new asset class right which very much I consider this to be a part of you have a wave of assets that come in that are all of you know kind of dubious amounts of quality right we saw it in the late 90s with the dot-com bubble so out in the mid 2000s we with a lot of the the maturation of Asian markets right in in South Korea and China even in what traditional capital markets in the Western world now you see it with you know smaller markets like Canada right where a lot of there's a lot more speculation there's a lot more speculative plays there's a lot of assets that are you know you know kind of varying quality so I think that you know for Ford the Ford the speculator who's willing to kind of sift through and look for you know potentially mispriced assets there might be something but yeah I would agree that across the top 100 most of the assets right now or effectively vaporware and marketing all right so let's see we got a few more minutes left you know what let's jump on price let's make sure we get the I do it the name of this panel is one moon so we should jump over to the price side of things so I'll just throw my own commentary first I've been a bear in this market since January it well if I believe January 12 for four or ten I went back through my videos and took a look when I decided to become a bear and that was last year by the way not this year January 12 that was last year and I've been saying 1,300 is the worst case scenario and as we get closer and closer to it we now bounced off of 3100 the 1,300 is slowly becoming more and more of a reality but it was my worst case scenario my best case scenario was actually about 5,000 that was the ultimate best case and we're now below that I still think we're going lower than 3 but it's definitely debatable whether we're going lower than 2 I still think we will what are your thoughts and why and then we'll talk about some of the details in those metrics so Mourad let's start with you yeah I took a glance on at some of your work recently as well I I think you're a little bit too bearish I think that we're not going below 2 K but we we may or may not have already bottoms I still lean 60% towards the fact that we haven't I think we will dip into the high 2000s mid 2000s maybe one last time but I don't think we're going below - below 2 K and you have a time estimate for this well I think we're bottoming this year for sure I think we're but I mean before the end of the summer and and essentially I think that bull market will begin in 2020 q1 or q2 2020 about you object so I am similar my views are probably closer to Murad's I think you know if this market if the bottom I don't think the bottom is in yet and I think that will probably settle somewhere in the low to mid 2000s the reason for that I think is because there's no there's a lot of dry powder out there that's waiting right that's waiting to deploy there's funds that have been raised right you know not just our dear friend Murad but you know many of many Western funds and funds here in Asia and in addition to ICO projects that you know manage their Treasuries reasonably well some of them have significant sort of nine-figure amounts of cash currently in their bank accounts and so I think for given the amount of dried powder you know it's the the amount of dry powder right now my anecdotal estimate is that it's in you know well north of you know in the billions of dollars right so I think that whatever we do see you know I anticipate that it'll be bought back fairly quick and that a you know won't dip them for too long all right now what about the old coin market and I know you mentioned earlier like some people like myself see a winner-take-all Bitcoin going back to 99 percent market cap but there is another medium out there like all of these old coins can survive but my view is that over time each of them are gonna be a smaller percentage of bitcoins market caps so Bitcoin doesn't to me doesn't have to go back to 90 95 99 Bitcoin can even be 30% of the total crypto market cap the question is where does number two set and even if Bitcoin is 30 percent of the total market cap but number two on the list is less than three percent of bitcoins market cap that's still separation and going forward so what's your view on something like a Tyrian for example because it has the most competition aetherium has insane competition from similar I guess decentralized ish project and similar centralized projects because even Amazon I can see Amazon offering a centralized database to execute all the ico smart contracts you like because it's all about being on the same platform for ease of data transfer ability you don't really need the decentralization of aetherium for your ICO in fact it could be a major technological problem for your company yes so I think a theorem is quite overpriced I think I personally don't really believe in that these smart contract platforms are going to accrue much value at all frankly speaking I have strong doubts about most theses in the space and I'm mostly a monetary maximalist I believe that the one two three store of value candidates are going to be essentially the only ones that are going to sustainably accrue value in over the next several cycles I think that etherium was grew up grew in price a lot because of essentially the ICO boom where a lot of sort of if tokens were locked up on both sides of that transaction I think etherium needs to deal with will have to deal with with competition they need to still prove that there's an even significant demand in the world for adapts a lot of unanswered scalability questions and I think that it's definitely far inferior to Bitcoin when it comes to just being robust money or a bus digital gold and I think that in the coming cycles more and more people will simply realize this truth and it will definitely essentially I am bearish if BTC in many ways I think aetherium is going through sort of an existential crisis right now right most of the original architecture is being scrapped over you know for a multi-year transition to a new sort of 2.0 architecture I think that you know the the sort of one killer use case or ether to date has been you know basically serving as the the reserve asset for the ICL bubble right and I think that we've seen over the last one year scene you know given the global regulatory freeze and depress prices we've seen that totally dry up I think that you know in the future I think that you know that could change I think that if that were to change it maybe it would make me more optimistic about it areum I think that you know even though there are a number you know there's dozens if not hundreds of teams that are building products on the platform I think that none of the products really have have achieved any sort of meaningful traction or adoption but you know I think that there are a couple of promising options there but even with success I don't know that that meaningfully changes the V sort of outcome I think that what would be interesting to see if is if if the market cycle does turn whether the the ICO market we saw previously would come back you know I I think that human greed is is almost limitless right so I think that that's within the realm of possibility regardless of whether or not whether how regulators or you know market participants feel about it I think that if that were to change you know I also don't know that yeah if there M will be with the platform of choice there's a number of other alternate competitors with which you can issue tokens there's other centralized providers like bit racks and finance that are launching products like you know finance launch pad that allow for teams to do token distributions and launches I think that with these kind of new offerings I don't know that it theorem as the sole reserve asset for you know this kind of kept facilitating these capital markets saying I don't know if that's going to hold up over time well said and okay so we got a few we're about several more minutes so I want to follow up on something you said Mourad and not everyone is gonna be a trader another one should be a trader in fact I teach people how to be traders and the first thing I try to do is let them know that maybe they don't want to be traders like I'm like the worst promoter of what I do because it is it's it's a rough job and it is a job it's like being a poker player it's pretty much gambling but as an investor and you mentioned that you you're not looking to invest in these smart contra platforms but bitcoin is a store of value so make a case as to why a person should allocate a reasonable amount of their investment portfolio or the retirement portfolio to me a reasonable amount is five to ten percent so why should they do that why should they allocate 5 to 10 percent to bitcoin as an asset class I think with with Bitcoin and sort of store of value in general we're probably looking at one of the biggest markets in the world the store of value market as a whole is around 300 trillion the monetary store of value is I believe 91 trillion and Fiat and Fiat like instruments almost 8 trillion in gold even if Bitcoin takes a small fraction of that its price will be trading at an order of magnitude are more higher than it is today I think we're still extremely early I believe over time superior products win in the market Bitcoin to me is a superior money to both gold and fiat in many many many ways and I think as time goes on Trust in Bitcoin comfort people being comfortable with Bitcoin and just sort of it's it's Linde effect all of these things will grow and with every one of these cycles you see people Bitcoin is something that you need repetitive attention and when people see for the third or fourth time that this thing doesn't only done doesn't only not die but continues thriving they will start being more and more comfortable with it I think Bitcoin isn't going anywhere I think Bitcoin is here to stay and 60 billion or whatever it's trading at right now is is just the beginning and I think that you can be see we're still everybody's still extremely early and I think allocating a small portion of your portfolio it doesn't even need to be 5% just 1 or 2% is a very very wise move just a quick follow-up because I wanted to get into the details of that why is the store of value markets so big and which I guess you can break that the store of value market into five ten twenty components so which of those store of value markets is Bitcoin most likely to disrupt yeah totally there's a lot of different things people use a store value there is a demand for various instruments and assets in the world for people to essentially save their wealth and people use real estate for that people use bonds stocks some use commodities many is gold most people use a lot of people you just use it use cash I think for the time being I think Bitcoin will is competing against sort of the tail-end of fiat currencies it's definitely not competing head-on against the US dollar or the Euro quite yet but with with in countries with sort of dysfunctional economies or rapidly inflating currencies countries with capital controls or and and the list goes on I think Bitcoin right now is still technically a collectible it's still kind of a digital gold but which is really really early in its monetization sort of curve in evolution it still has sort of very very large shoes that it can theoretically fill it's the fact that people can't take away from you or stop your transactions most people when they will start realizing that it beyond these facts it can all nobody can also print it and I believe the UX around the entire industry will improve as well with time these things will become a reality and as people will get comfortable with these ideas so will their allocation in their portfolio and I believe in sort of a post fiat world you will live in an age which was more similar to sort of the the gold standard era and sort of the cash allocation in people's portfolios will be bigger than it is today because fundamentally cash itself will be more robust and more uninflated alright we've got two minutes left I actually want to do the opposite question for you Arjun so what scares you when you go to bed at night about I guess assuming you have some value in in the crypto space / hoping it's mostly Bitcoin so what scares you that we're all crazy and this was a big mistake sure I think that they're you know in this monetization process there are significant risks right you know the the future you know every time I talk to Murad I always get a glimpse of the future but the future that Marauder is describing it comes head-on with something that lots of men with guns will fight to protect and so I think for me the significant risks that you know are in this process one you know global regulatory crackdown on you know Fiat on-ramps I think that would be you know significant setback and it would edited back to say so I think many many years potentially drilling all of the progress that's been made I think a significant technical bug I think that what we've seen we've seen over the last year a number of minor technical failures on large public blockchains I think that we saw we were very close to seeing a significant inflation oriented bug with Bitcoin which was narrowly avoided you know in terms of doing any any meaningful damage but I think that there's still technical risk in that the project is still relatively early right we're ten years into what will be kind of a multi decade you know undertaking so I think that you know the technical risks and certainly I think for most people you know they think of Bitcoin and Bitcoin development as a very abstract concept for me it's very real something that keeps me up at night and I think you know the third kind of and most important thing is that I think the the default state you know despite the fact that you know there are headwinds right you bi is a headwind modern monetary theories I had when despite the fact that there are headwinds with Bitcoin the default state is still that you know Bitcoin dies from irrelevance II and so I think that you know focusing on you know explaining the asset and educating as many people as possible I think is one of my primary orientations as a result of that all right cool thanks a lot it looks like we are out of time so I'll let you have like two sentences to add Mourad what scares you at night you guys go ahead tell the people where they can find some of your work yeah totally um I would agree with Arjun I think the to me I'm only particularly concerned with the first out of the three sort of risks he mentioned and that would that's definitely sort of the government crackdown I do think that sort of with every cycle and with every year as you see more influential figures institutions ultra high-net-worth individuals sort of get involved with Bitcoin and it being slowly but surely integrated in the financial system the like a complete sort of ban on Bitcoin is becoming slightly less likely with every day but yeah the sort of the regulatory risks are probably still the highest in my mind all right cool so working people I'll follow your work you can find me on Twitter at must-stop Murad well ojen I likewise on Twitter at Argentan blj perfect I'm Tom vase you can find me on Twitter at Stone vase and my youtube channel is also some vase Mourad has been on this channel will have them on again and thank you so much for listening to the one Moon panel oh and one is moon moon is one and what is your official moon as we go off the stage well the the moon moon is in 2023 2023 at what price is moon to you honey cake Hajj okay Arjun the Moon Moon at least a hundred gay movie stars okay you have a time want a bubble five times this big in three years everybody that guys you