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Here’s why crypto prices are down

On this week’s episode of The Market Report, Cointelegraph’s resident expert discusses why Bitcoin has been unable to break through the $29,000 level and why crypto prices have been falling.

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Billionaire Ricardo Salinas Fires Back At Warren Buffett’s Bitcoin Slander

Bitcoin is not topping the list of the favorite investments of some big names in the financial sector. One of those is billionaire Warren Buffett who has not been shy to voice his displeasure with the digital asset. This time around, Buffett has once again made known his hatred for the digital asset by saying that he would not buy all of the BTC in the world for $25. This has drawn the ire of investors in the space, one of which is Mexico’s third-richest man, Ricardo Salinas Pliego.

Warren Buffett Disses Bitcoin

Billionaire and legendary investor Warren Buffett recently made some remarks about bitcoin. The most popular of these have been the fact that he said that if he were offered all the bitcoins that exist for a measly $25, he still wouldn’t take the deal.

The Berkshire Hathaway head said this at the annual shareholder meeting where he once more reiterated his disdain for cryptocurrencies. He explained that bitcoin had nothing to offer, making it an unproductive asset with no tangible production. 

Related Reading | Tether (USDT) Q1 Trading Volume Plunges To $5.3 Trillion In Quarterly Low

He compared the digital asset to other stores of value which include land and apartments. Both of these, the billionaire admitted he would jump at a chance to put money into them. However, he wouldn’t do the same for bitcoin because it doesn’t produce anything and he would “have to sell it back to you one way or another.”

Despite the popularity of the digital asset over the years, the billionaire is still not convinced of its valuability. He pointed to the fact that he can’t tell for sure where the asset will be in the next five or 10 years but remains completely sure of the fact it does not produce anything. 

“It’s got a magic to it and people have attached magics to lots of things,” Buffett noted.

Salinas Fires Back

Buffett’s comments about bitcoin have no doubt stirred up criticism from the bitcoin community. They came out en masse to support and fire back at Buffett after the video made the rounds on social media. Bitcoin supporter and Mexican billionaire Ricardo Salinas Pliego also took time out to rebuke Buffett’s comment.

BTC holding the $36,000-$38,000 support level | Source: BTCUSD on TradingView.com

Salinas noted that Buffett was old and immune to change. Also adding that he was obviously commenting that he has no understanding of whatsoever. 

It's sad to see him rambling on about a suubject he clearly does not understand. That's why the future ALLWAYS belong to the young and not the OLD. https://t.co/2L5Lc8zHjE

— Ricardo Salinas Pliego (@RicardoBSalinas) May 1, 2022

Related Reading | Bitcoin Halving Model Suggests $24,000 Bottom Before Year’s End

The billionaire has not been the only one to fire back. Others have pointed out that Buffett continues to have holdings in crypto-friendly bank Nubank, as well as SBI Holdings and Bank of America which own more than 10% of Ripple and a Ripple partner respectively. 

BTC continues to maintain a good position on the charts. It is currently trading at $38,690 at the time of this writing.

Featured image from Bitcoin News, chart from TradingView.com

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37% Of U.S. Investors Decline To Liquidate Cryptocurrency Assets in Bearish Situations

Recent research reveals that US cryptocurrency investors have an average allocation of $1,107 in digital assets. About 37% of the investors confessed non-liquidation of their crypto holdings even for important bills or other payments.

However, there’s this discovery that Elon Musk has a great influence on the crypto-related decisions of most respondents.

A survey of 1,000 US crypto investors by GamblersPick, a betting platform, displayed a shocking revelation. 37% of these holders won’t dispose of their assets irrespective of the circumstance. Furthermore, 51% confirmed that luxury purchases wouldn’t be too enticing for them to opt for cash out.

Also, the survey took a critical examination of the different generations of crypto investors. It reveals that the Baby boomer and Generation Z groups have the largest and the least investment in cryptocurrency, respectively.

In addition, the male forks have more interest in digital investment than women, with an average of $1,940 worth of cryptocurrencies. On the other hand, the statistics for the female is at a median value of $1,375 worth of digital assets.

Related Reading | Facebook Officials Claim Novi Received Approval From Major U.S. States

From its survey, GamblersPick discovered an increase in the demand for digital assets among US investors. This recent surge in demand even prompts people to borrow cash from family and friends to invest. It reflects in the results of the use of credit cards in purchasing cryptocurrencies by every fourth respondent.

The investors revealed that they plan to increase their cryptocurrency investments by adding an average of  $1,645 within 12 months. The statistics have men on the lead again with the proposal of increasing with $1,988 while women plan for $1,100.

What Influences Decisions Of Cryptocurrency Investors?

Furthermore, the research reveals the reason behind the recent increase in interest in crypto investments. Most of the respondents, amounting to about 75%, confirmed their confidence in a future surge in the value of digital assets. Moreover, while 24% see cryptocurrency as a means of gaining great returns, 32% use it to diversify their portfolio.

The cryptocurrency market is back on track after a bearish pullback | Source: Crypto Total Market Cap on TradingView.com

Additionally, about 21% of the participants used cryptocurrency as a hedge over inflation that emanates from the swindle in the economic condition. The recent COVID-19 pandemic, as well as the massive national currency print-out, are contributory factors.

Related Reading | Solana Continues Bullish Trend, Becomes The 10th Largest Cryptocurrency

Also, online forums and social media have a prominent influence on cryptocurrency-related decisions and moves on U.S. investors. Among them is Reddit that topped the list having about 34% influential power.

Others include Twitter, Youtube, and Facebook, with their influences rated as 26%, 23%, and 16%, respectively. When it comes to influences from individuals, a man stands out among others. His influence is even greater than those from the mentioned companies above.

He is Elon Musk, the CEO of Tesla, a popular electrical car company. 35% of the research respondents confessed that their choices in digital assets are based on Musk’s statements, opinions, and tweets.

Other influencers are Warren Buffett ranking second and Snoop Dogg, the rap star, ranking third. They have an influential rating of 9% and 7%, respectively.

Featured image from Pixabay, chart from TradingView.com

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Fear And Greed: Sentiment Turns Neutral As Bitcoin Stagnates, What To Do?

It’s the calm before the storm. What to do when the Fear and Greed index turns grey? Warren Buffett already told us to be greedy when others are fearful. We already know that we should be fearful when others are greedy. What should we do when the market it’s at a rare state of balance and expectations are high? We should probably take a page for those Bitcoin maximalists and… wait for it… HODL!

One of the main criticisms that the Fear and Greed Index gets is that it encourages traders and investors to try to time the market instead of holding strong. Bad things happen to those who try to time the market. Yet, we try to do it. The temptation is too strong. Bad things happen to those who trade emotionally. Yet, some fall for that trap over and over again. In fact, it could be argued that the Bitcoin and cryptocurrencies markets are even more emotional than the traditional ones. And that’s saying a lot. 

In any case, before making any rash decisions, we should remember what we’re talking about here.

The Fear & Greed Index goes into neutral territory | Source: Arcane Research
What Exactly Is The Fear And Greed Index?

We at NewsBTC deal with this constantly. Even though the Fear and Greed Index is a criticized and questionable indicator, there’s an undeniable connection to the market that’s obvious even to the casual observer. When we found a bizarre correlation between the Fear & Greed Index and UTXO data, we prefaced it with:

“As a speculative asset, nothing else quite behaves like Bitcoin. Shifts in sentiment take price action to the extreme. As a result, tools have been developed to monitor the fear or greed in the market.”

The website Alternative.me calculates the main Fear And Greed Index for cryptocurrency markets, they explain its reason to be as:

The crypto market behaviour is very emotional. People tend to get greedy when the market is rising which results in FOMO (Fear of missing out). Also, people often sell their coins in irrational reaction of seeing red numbers. With our Fear and Greed Index, we try to save you from your own emotional overreactions. There are two simple assumptions:

  • Extreme fear can be a sign that investors are too worried. That could be a buying opportunity.

  • When Investors are getting too greedy, that means the market is due for a correction.

We, very simply, explained why when we described how the Fear And Greed Index can be used as a trigger indicator:

“Financial market sentiment can almost always be used as a contrarian indicator. But in a speculation driven industry where hype and buzz matter more than fundamentals, this is even more true.”

BTC price chart on Bitstamp | Source: BTC/USD on TradingView.com
What Does It Mean When The Sentiment Turns Neutral

After what seemed like years of coldness and extreme fear, the market sentiment started improving as early as a week ago. And, even though it doesn’t feel that way, this advance into neutral territory is a huge improvement. As Arcane Research said in their “The Weekly Update” report:

“The Fear & Greed Index has climbed rapidly since late July and touched neutral levels for the first time since May. Despite the slight decline in the last couple of days, the market is certainly getting more bullish. This bullishness is also evident in the futures market.”

So, what should you do now that the sentiment turned neutral? Not much. Keep your finger on the trigger, though. Things are about to get interesting.

Featured Image by Kristopher Roller on Unsplash – Charts by TradingView