The cryptoassets industry is becoming more relevant, especially after the second half of 2020, the markets have seen a revolution that is unlikely to suffer a setback. With this in mind, there are important aspects that need to be analyzed, and for that We spoke to one of the most famous traders in the Spanish-speaking crypto ecosystem, Daniel Muvdi, who has been in the markets for more than 14 years starting with forex, options, futures and managing large accounts and speaking at events such as consensus. He is currently Head of Markets at Quantfury and has online retail stores that accept crypto assets. It has a YouTube channel for trading crypto assets that started in 2017 and currently has more than 135,000 subscribers. It also has the Bitfinanzas website which provides information on the financial markets.
Eloisa Cadenas (EC): Daniel, it is a pleasure to greet you and I want to start this interview with a conversation about Bitcoin and its future perspective. The first question is, given that bitcoin price behavior has a fractal component, how far do you think bitcoin price can go this year and how would you fundamentally analyze these arguments?
Daniel Muvdi (DM): In the most recent analysis I’ve done, I’ve indicated that the prices we’re looking at as a forecast for Bitcoin can reach $ 100,000 or more, taking into account patterns like fractality. However, it is possible that a correction could be made in the $ 100,000 range. The crypto community has embraced the laser eye trend better known as “laser focus”. which was to hit the 100k mark. These kinds of things can be positive in bringing the price up to this level; So maybe that 100,000 is a point where you can take the winnings. This is a theory, but to do an analysis and take into account the cycles of Bitcoin, the price increase in the last “rally”. and others, if factors like halving, the price could reach as high as $ 120,000 or even $ 250,000 in the coming cycles.
(EC): So we come to $ 100,000?
(DM): I think we hit 100,000 this year but until we see some corrections I don’t think it will be a linear move. It seems to me that from here we will see a lot of volatility at $ 100,000, but it is very likely that we will hit it this year.
(EG): In technical analysis, what aspects of Bitcoin can be distinguished from those of other assets that are traded in the markets? TO
(DM): For me, fundamental analysis means 80% at any point in the trade, and I dedicate the remaining 20% of the information only to technical analysis to determine the key entry or exit points of a price. However, in order to determine whether the price will go up or down, I rely solely on fundamental analysis. I agree that it is very likely that the movement is based on news, which is based not only on breaking or eliminating a point of resistance, but sometimes these two situations come together and then both are analyzed together. Perhaps when analyzing the basic instead of the technical, expectation can come first. With the technical, you are reactionary as opposed to the fundamental, which allows you to do more research and be more aware of the direction of a particular asset.
On the question of whether Bitcoin is different from other assets in terms of the way it is analyzed, I don’t think so. It seems to me that although it is volatile and disruptive and has a different technology, maybe it will move more abruptly because it is newer and not gaining acceptance because it has not yet reached the point where there are other assets like Gold; But gold behaved very much like Bitcoin in its early days. So I think Bitcoin is basically reacting to fundamentals in the same way as any other asset. The only difference is the volatility of this reaction, which is greater with Bitcoin.
(EG): What do you think of the stock-to-flow (S2F) model?
(DM): We cannot deny that it was right. The S2F is simple, but it works. Perhaps a more fundamental reason is the fact that every halving halves the amount of coins that go into circulation in the market. So it’s just a question of supply and demand. When you make less supply, the price tends to go up and this happens because the demand keeps increasing. While the S2F is simple, it worked because it bases almost all of its principles on halving and as this event continues to occur it will keep the Bitcoin price rising until we reach the end and we let ourselves go only with the commissions (fees).
An important point that should be discussed and analyzed is that Bitcoin is becoming increasingly popular. This will of course increase the demand and several people with a lot of money will want to come into play and likely several of them will amass bitcoins. So it’s something that we need to consider as we want Bitcoin to be decentralized. What I’m very happy about is that Bitcoin is becoming an oasis of value. Some believe that Bitcoin will be a currency. I think that the direction of Bitcoin should not be a digital currency, but a much simpler and more solid haven of value than gold. For example, it’s easier to travel with Bitcoin than with gold. This also applies to entering a country and crossing the border or for the easier transfer of values to another country. So when you find that functionality is reduced in quantity, you recognize ease of use, but an oasis of value at the same time, and that makes sense for the Bitcoin revolution in my opinion.
This is the phenomenon that characters like Michael Saylor or Max Kaiser talk about and we could be different, but they see something special and it replaces gold as a haven of value.
(EC): In other words, since there is a positive correlation between Bitcoin and most other crypto assets, do you think that investing in Bitcoin only is the same as having a diversified portfolio? Or when would you recommend diversification?
(DM): It’s something that has been raised a lot in a long time. One of the things we need to be clear about is that Bitcoin may continue to lead this revolution and lead to “cryptos”. with him. As cryptocurrencies grow, we will focus more on real solutions and less on white papers. In 2017 and 2018 many projects “painted houses in the air” for us. with papers that said they would change the world in a thousand ways, but almost none of them managed to do what they said. So this will be like investing in the stock market, where there are times when some stocks do better than others and there are times when they don’t, depending on the cycles. For example, with the pandemic, Netflix rose sharply due to the pandemic, the shares of airlines fell because the planes weren’t used, because you couldn’t travel. This is also happening with cryptocurrencies and this is gradually showing the maturity of the crypto market as we see projects that benefit from their good business and make the investment much deeper and the research much more concrete. I recommend having Bitcoin in my personal crypto portfolio. I have almost 50% crypto in bitcoin, the other 25% or 30% in ether, and the rest in other altcoins that may reveal interesting business opportunities. For example, I’m seeing a big revolution in NFTs, so the projects that make this industry possible are going to be interesting. other examples are OGN or UMA Project trying to bring all markets into the crypto world through plastics, including options and futures; It’s very interesting and it can be a revolution. On this basis, it is worth diversifying a bit as not all of them will move like Bitcoin, although it seems that way. At this point the market is highly correlated, but it will change as it matures.
(EC): Bitcoin ETFs in the US have been around since requested for a long time and have not yet been implemented. Will 2021 be the year of ETFs? How could it affect the price of Bitcoin if it is authorized?
(DM): ETFs are something that we should view as positive. When ETFs are launched, an escrow is required and the real bitcoins go straight to that escrow. This means that when someone buys a Bitcoin ETF on the exchange, they are buying real, physical Bitcoin. This is very different with futures, which do not have the actual asset. On this basis, if real demand is generated by ETFs that make buying Bitcoin easier and you have to accept them. Therefore, the ETF will cause the demand for Bitcoin to increase very sharply. For me it is a good thing because demand will lead to a rise in prices and we will have limited supply. This can cause the price to get stronger and skyrocket. In general, it’s a positive thing.
(EC): What do you think of institutional investments and cases like microstrategy? Do you consider it 100% beneficial to the ecosystem?
(DM): I think that in the end everything will be institutionalized; It is becoming part of a larger ecosystem and that is exactly what is happening with Bitcoin. We see Tesla buy $ 1.5 billion worth of bitcoin, and that’s where you can tell how many bitcoins went to just one company. So when we analyze we find that the price of a single 1 bitcoin is actually a lot of money for a person that can represent a lifetime’s savings. In fact, it seems that fewer people are accumulating them, but the most important thing is that satoshis, who represent the fractions of bitcoin, continue to exist and it doesn’t matter that more people keep buying them because they keep accumulating value with small investments and they are not deprived of this opportunity to invest, as this is the case with some promotions, for example on a stock exchange, I could not buy a share of $ 3,000. Sometimes they split the shares so that people can buy them at a lower price. In the case of Bitcoin, this is not the case as it can be broken down into a million satoshis. This means that we can all keep investing.
(EC): Do you think stablecoins are positive in the ecosystem?
(DM): Stablecoins seem positive to me, the problem with stablecoins is that they need transparency. The most common way to buy Bitcoin is through a stable coin. For example, when printing tether, someone has to buy bitcoin. In the case of Tether, each tether should be covered by one dollar. The problem is that we can’t see him in practice and he was very bad at accepting his mistakes and accepting what they promised. They didn’t do the audits and this can end very badly in my opinion if they don’t have the real backing. I’ve said it before and I’ll say it again with all responsibility: I think that the big stone in the Bitcoin shoe is tether. At some point this has to be clarified for the better or for the worse of the Bitcoin price. It is therefore important that we access stablecoin, which offers us the greatest possible transparency.
(EC): What is your opinion on Binance Coin (BNB) and what do you think is the reason it has grown more than 1,300% in just 2 months?
(DM): Regarding BNB, the question arises whether BNB is the replacement for Ethereum. This has already been asked on other projects like EOS or NEO and they didn’t kill Ethereum. Ether is the cryptocurrency with the largest number of projects within its network, the innovation within Ethereum is enormous, and the number of good projects born with great teams is incredible. That said, BNB is coming which is good business, it is the business of Binance exchange, one of the best cryptocurrency exchanges. I’ve always said that having an investment is good currency because it’s an exchange. The problem is that you add Binance Smart Chain (BSC) because they are just using the Ethereum code, centralizing some nodes and doing it with the intention of reducing transaction costs as much as possible and then doing what they do do is an “imitation” of Ethereum to try to steal users from the Ethereum network and give them better prices on transactions. The problem is that the projects they are running on this network are all copies of what we saw in Ethereum, for example PancakeSwap ($ CAKE), the code of which still contains the Uniswap titles. ie the PancakeSwap code still says “Uniswap”. in some cases; In the truest sense of the word, they copied the code and stored it there anyway. And who is behind CAKE? This is another thing that worries me, if PancakeSwap were born organically it would be fine, but who invested in order for PancakeSwap to be born? The owner of Binance with $ 100 million. This is a structure that they created, they sell an image that doesn’t exist, they have created a number of projects within the Binance network and they promote it with excessive profits to get the attention of users who don’t have have the knowledge necessary to understand everything that is going on, that’s my opinion, I’m not saying Binance is a bad exchange, it’s good business, but it seems to me that BNB was good business until they did with Binance Smart Chain and have mixed up with all of these things we see that are not entirely ethical.
(EC): Finally, the mandatory question that goes ad-hoc with these times: Do you believe that Binance Smart Chain will end up being “displaced”? to the Ethereum blockchain.
(DM): The Ethereum network is expensive now for one reason: since a lot of people want to use it, the problem is actually a good one. The solutions are just around the corner: Layer 2, Optimism and the Rolls app. Those three combinations will bring Ethereum fees down to pennies even under BSC, and we’re a few months away from that. No other network currently has the trust and security that exists in Ethereum. Ethereum’s decentralization is a thousand times greater than BSC’s, and there is no reputable Silicon Valley project that uses any other network other than Ethereum. I don’t think a Silicon Valley project was born today using BSC or another like TRON and it’s for safety and trust. I understand users want to switch to a much cheaper network and I completely understand that they are using BSC and I hope it continues to work, but I am trying to understand what Binance is doing and what they are promoting happen when Ethereum is the lowest Charges and all users can use them? We’ll have to wait, but I don’t think BSC will surpass Ethereum at all. I even dare to say that BSC is not even the top 3 networks.
It is worth remembering that in the US, Binance was accused of allowing users to leverage its exchange in crypto, which is banned by the SEC. This was the same reason why Hayes, the CEO of BitMex, had to surrender in Hawaii. I am worried that at some point they will sue Changpeng Zhao (CZ) and what will happen to BNB? In this case, I don’t want to imagine the market’s reaction.
(EC): What do you think of the recent Coinbase exit?
It seems to me that the introduction of Coinbase is positive for people to learn more about cryptocurrencies. Many more analysts will see it and wonder what it is. So it seems positive to me in terms of acceptance. In terms of the share price, it will have great volatility as it is related to the success of cryptocurrencies. Hence, I think $ COIN can highly correlate the stock with the price of Bitcoin and cryptocurrencies in general.
Final remarks by Daniel Muvdi
This bullrun is not over yet, but the markets need to be traded responsibly and I wish the entire Cointelegraph community very good trades.