Why Crypto Is Crashing

cryptos that have failed these are the lessons i want to talk about in today's video and sort of explain what's been going on this week because prices have fallen substantially people are like it's a crash bitcoin's like i made you 5x on your money i'm sorry i lost 10 percent there's a good chance that in the next few months things are going to become insane things are going to get really exciting for example jp morgan just announced that they think bitcoin is going to go to 146 000 and that means ethereum is going to go closer to 15 000 so again exciting times ahead which is also crazy that the ceo of jp morgan said that he's the guy that also said bitcoin was worthless but if anything i wanted to make this video to remind myself that things aren't going to continue going up forever and there's a few lessons that i think we need to remember before we get too excited because there's a good chance that things could go equally just as low to maybe 35 000 according to jpm or maybe even lower i also want to put in perspective that even though bitcoins lost over 11 in a single month this is also after we made 27.4 in a single month in october this is also after the fact that october last year bitcoin was worth 15 000 and october of this year it was worth 53 000 that is a 466 percent increase now if we take a look at the stock market in that same time frame from october last year to october this year the stock market returned 37 which is still incredibly good but it's not even close to triple digit growth rates so that's exciting but at the same time i just want to make sure we're careful so let me just be dad now and explain everything that's going on how things can go south and how we can protect ourselves let's begin hi my name is andre jack hope you're doing well come for the finance and stay for the andre check youtube please get your captions together my name is andre jake not honorary stop it get some help i was just at a show the other day here in las vegas and i saw this really cool rollerblading act which kind of reminded me of crypto i saw this girl being tossed round and round and up and down and i was like that's bitcoin so let's talk about what's going on this week in my shiba inu video i asked people what will it be next well now we have the answer miss doge get floki was literally a sign that was on a bus in london promoting floki and it's making people angry imagine going to school for 16 years paying 120 000 to get an mba only to watch another dog themed crypto make more money than any other asset on earth which is why as long as the crypto markets have been around people have been creating dog themed coins and making money on it now let me step off my pedestal and show you my portfolio because i have a lot of coins that i gambled on in 2017 which includes coins like bitcoin cash iota xrp bitcoin satoshi vision omg i have dash and neo and a ton of other ones i'll tell you what i've learned from some of them but first i just want to quickly show you what's been going on this week and why the price has been going down the first reason is because of liquidations in the derivatives and futures markets i know fancy words but in a nutshell this means whenever the price of an asset like bitcoin for example goes down to a certain price level people that leveraged or borrowed their money are forced to liquidate or sell off their holdings at a certain price and when there's enough people that sell their bitcoin the price drops even more which could force another wave of liquidations which could force another one and so on and so forth kind of like a bunch of dominoes that fall over and whenever people sell their bitcoin or any asset it's because of one of two reasons the first reason is because they want to collect their profits they want to make money and this can happen when an asset hits an all-time high like we just saw when bitcoin hit 69 000 people saw that and they said well new all-time high i'm out they sell they get their money and that's what happens but the second reason is because of fear and whenever there is uncertainty in the markets it creates enough fear that people sell their bitcoin because they just don't want to deal with it and that's something else that can happen so if you've noticed your portfolio go down in value and you're losing money here's probably why that's happening one of the reasons is because china banned bitcoin for the ten thousandth time we know we banned bitcoin before but this time we're banning the ban on bitcoin because now we can ban bitcoin again so we can ban bitcoins bitcoin's ban you know what i mean i don't really pay any attention to this but some people do and they sell reason number two is because on monday the new infrastructure bill was signed into law and with that there were three new provisions that will affect crypto investors i made an entire video about this but i know most people probably didn't watch it so i'll summarize it here provision number one is gonna label a lot of people as brokers because anytime we transfer digital assets on the blockchain which includes cryptos nfts and tokens this means we'll probably have to fill out form 1099b which means we'll have to keep meticulous track records of our cost basis or how much we bought something for provision number two is something that says anytime we receive ten thousand dollars or more of crypto we have to report to the irs the social security number and the address of the person who sent that money to us and the third provision is a change to the wash sale rule by 2022 we will no longer be able to sell our assets at a loss and then buy the same thing to claim those tax deductions so those are the three provisions that are sort of affecting the price as well the third reason why bitcoin's price went down is because the taproot upgrade went through which means that bitcoin will have better privacy better efficiency and the capability to do smart contracts kind of like ethereum which is huge news you'd think the price would go up because of that but normally when you're talking about very speculative markets whenever something happens that's when speculators sell to collect their profits but long term this is a very good sign of things to come for bitcoin now the fourth reason is because the sec rejected another spot etf and this is bad because a lot of bitcoin's price this year was baked in on the assumption that this year we'll get the spot etf but now it looks like that's not gonna happen thanks a lot gary gensler yeah human thumb i'm just kidding please don't come after me i'm gonna take this out of the video or will i i'm just kidding but seriously the sec does have a relatively good reason for why they haven't approved the spot etf just yet because they believe bitcoin's price is still heavily manipulated and they're probably right lucky for us the stock market's not manipulated at all just kidding hashtag sarcasm but the last reason that bitcoin's price is going down is because right now in florida there's a high profile legal battle going on over the control of one million bitcoins and that's casting a lot of fear and uncertainty over perhaps revealing the real identity of the creator of bitcoin satoshi nakamoto so those are some of the reasons that i'm seeing in the market that could explain some of the reasons why the price is going down so now let's talk about some of the failed cryptocurrencies throughout the years that have taught me a lot that i hope you learn from as well before i tell you what they are just want to quickly say that if you have any of these cryptos in your portfolio i'm not saying that they are total failures or that they won't come back or that you shouldn't invest in them i'm just saying that each of them taught me something unique that i want to share with you and the first one is bitcoin cash i have roughly 17 of them and i received an equal amount when bitcoin split and hard forked into bitcoin and bitcoin cash this was in 2017 during what's called the scaling debate the scaling debate happened amongst the most influential people of bitcoin at the time the people with the most power and money and influence and they couldn't come to an agreement on how to scale bitcoin because bitcoin is going to become a global world currency it needed to be fast cheap and reliable but how do we get there because right now we can only handle seven transactions per second and bitcoin needs to handle tens of thousands of transactions per second if it wants to onboard the entire world so how do we do that do we scale the blockchain itself aka on chain by increasing the block size above one megabyte or do we scale off chain with something like the lightning network none of these words meant anything to me in 2017 but i sat back ate my popcorn and watched the community debate now at the peak my bitcoin cash holdings were worth over four thousand dollars per coin so close to seventy thousand dollars which is a ton of money especially at that time but i never sold this is because i appealed to authority i saw somebody who i wrongfully believed was satoshi nakamoto and the lesson that i learned is to never appeal to authority no matter how smart that person is how influential they are or how much of a role they had in creating the technology itself because if i had sold my bitcoin cash i would have made a lot more money than i ended up with because today it's worth roughly the same amount as it was in 2017 which is a huge opportunity cost don't deify people even if they are extremely influential says the youtuber the next crypto i want to talk about is iota because iota taught me so so much now iota was the seventh largest cryptocurrency at the time in 2017 and it promised some amazing futuristic technology and most importantly a promise to make me rich no i didn't really promise that but you know how it goes you hear some futuristic tech and you're like wow this is what sold me at the time let me give you the sales pitch first because iota used something called trinary math which allowed it to exist on something called the tangle instead of the blockchain this is better than bitcoin's blockchain apparently because it's more secure and it's faster and it's quantum computing proof and it wasn't like bitcoin though because what it allowed us to do is to exist in a machine-to-machine economy that was enabled by the iot the internet of things just saying this out loud makes me sound so buzzwordy but what this means is imagine we live in a time where we have autonomous machines like dows or decentralized autonomous organizations that took physical forms like for example a car that could drive itself from place to place imagine this car could transport cargo and passengers wherever it needed to go and whenever it completed a task it would get paid by another machine underpinned by this iota system so imagine this car could just pay its own insurance it could pay for its own fuel and electricity and registration it didn't need any external inputs from any other company or any other person because it wasn't owned by anyone it just kind of stood alone by itself like the daos of today and i thought that was such a cool futuristic idea because eventually that would allow us to create ai i know this sounds far-fetched but believe it or not they actually put out a press release saying that they partnered with microsoft and i thought wow microsoft if there's any company in the world that knows where the future could be headed then it's tech companies like microsoft and i bought in turns out that press release was an exaggeration and clever marketing and it was sort of a lie and that's what taught me my three lessons which is number one don't buy into something because it sounds futuristic because they made a pretty road map and promised you the world because they might be solving problems that don't actually exist in the present time and number two don't forget about lesson number one don't appeal to authority just because somebody tells you that something is true or is going to happen or that they're going to partner with influential people doesn't necessarily mean that that will happen also because good tech doesn't really get adopted based on who is promoting it even if it is influential people and at the end do your own research is lesson number three don't just buy into what the team tells you today iota is making a slow comeback and i still have it in my portfolio but only as a speculative gamble and i would never advise anyone to follow in my footsteps for anything so i don't even know why you're watching this video let's just skip bsv bitcoin satoshi vision i've had it since the 2017 scaling debate let's talk about litecoin instead litecoin is the digital silver to bitcoin's digital gold now what litecoin taught me is not to chase something just because it's cheaper because whenever people see litecoin which by the way is listed on every exchange that bitcoin is listed on because it's a hard fork of bitcoin which also taught me not to chase the many hard forks of bitcoin they'll see that litecoin is cheaper and they'll think well bitcoin's too expensive so i'll just buy litecoin instead but what you might have not known about is that the creator of litecoin actually sold all of his holdings way back in 2017 made millions and then left now there's nothing inherently wrong with doing that but if you leave it sends a bad signal to the community not to mention that even though he's still a part of litecoin there was a tweet that they retweeted about walmart accepting litecoin which is actually not true now they did say it was a mistake they apologized and even though it probably was a mistake it still should remind us that creators of cryptocurrencies have a heavy influence on the price and that we should be very careful the point is this space is filled with empty promises and dollars spent on marketing instead of product development filled with colorful technobabble words which make us feel like people are maybe smarter than what they actually might be now that's not to say that you can't make money investing in these because omg is a great example that still has a two billion dollar market cap how is that possible two billion dollars after all that having said that as bitcoin and ethereum continue to go up in value there's just one more thing that we have to remember that is still a major risk and that risk is tether just as much as crypto has a chance to go to the moon it has a chance to hit rock bottom because tether this stable coin that's supposed to be backed by one dollar for every one coin they print isn't actually backed by dollars as much as it's backed by commercial papers which we still don't know where those papers are held what they actually are or what that even means and tethers printing press has been cranking overtime remember how i showed you bitcoin's price chart between october last year to this year it roughly four and a half to five x well take a look at tethers market cap because last year in october their market cap was sitting at 15 billion dollars and this year in october it went up to 75 billion that's a factor of exactly 5x now i'm not saying that all of the tether that was printed this year was used to inflate the value of bitcoin but this would be irresponsible for us to ignore that there is some correlation even though tether is not really artificially increasing the supply of bitcoin if anything tethers actually helping us get richer because it's inflating the value of bitcoin but the real risk is that when bitcoin goes down which inevitably someday it will when we have a bear market or the next cycle and it goes down substantially if enough people panic at the same time and want to convert their tethers for dollars we might find out there's not enough dollars to convert back to and if that happens there could be a huge liquidity crunch and a whole collapse of the whole stablecoin system which would be horribly bad for the entire crypto market coffeezilla has some great videos on tether very well researched and if anything this is a warning that even though crypto is supposed to fight inflation that there are still central bank-like mechanics inside of crypto too so the next time i'm feeling fomo i'm going to watch this video again and again because mostly i made this video for myself to remind myself to act responsibly as always don't forget to have a wonderful day smash the like button subscribe if you haven't already go grab up to 250 worth of free bitcoin with this blog file link right here blockfy.com forward slash andre go get your two free stocks with weeble using the link down below and then you can track them automatically with spreadsheet linked down below in my patreon love you thank you so much for watching this video i'll see you back here on monday and friday sometimes a wednesday i'd love to know your thoughts i'll see you soon bye

Channel: Andrei Jikh

Views: 364,050

Keywords: crypto, bitcoin, stock market, passive income, dividend investing, dividends, dividend stocks, crypto crash, ethereum, stock market crash, bitcoin crash, NFT, how to buy bitcoin, cryptocurrency, robinhood app, best trading app, stocks, investing, investing for beginners, how to invest in real estate, how to invest in stocks, best stock trading app, credit score, real estate 101, andrei jikh, best investment, dogecoin, bitcoin etf, m1 finance, fundrise, robinhood, portfolio

Id: oIs6S1RqA2I

Length: 15min 42sec (942 seconds)

Published: Fri Nov 19 2021