Bitcoin has just taken the biggest day dip it has had in years
Bitcoin just took the biggest day dip it had in years, technically it happened in two days, I think, but 51 percent to the bottom more than 50 percent in 24 hours 63 percent if you measure from the local top we had about three weeks ago 63 percent you know what this looked like about four years ago in august 2016 i am going to make a comparison with four years ago it is not exactly the same what i get that you know the dip here, not so serious i get that but there are some similarities, the market structure looks similar except that just like today in 2020, here in 2016, this was about a year after the market rose just over a year ago, many people were suspicious in 2016 from the first rally here see this first rally in 2016 was caused because a lot of people bought a Ponzi scheme so people weren't sure if it went away or if it was legit so this second rally i compare it to people felt a little bit better about this because you know they just gave a little bit more of their trust and boom shake out just like we have today but after that Bitcoin never went so low again
I was discouraged from seeing a 50% shakeout in Bitcoin, of course I was discouraged, did I ever think about selling, did I ever think about capitulation no, honestly, the basics for Bitcoin were not there Bitcoin yet should be this uncorrelated property. Hey bitcoins should be this hedge, what the heck is going on, hedges shouldn't be doing this and fueling world markets around the world if Bitcoin ever became a hedge, wouldn't that be now let's see.
I want to take you back to twelve years ago, this was before Bitcoin even existed, so we have to go to traditional markets. I'm talking about a special time in financial history, of course, which was the 2008 global financial crisis, many people consider the 2008 global financial crisis to be the worst financial crisis since the Great Depression now, which is of course before 2020, but refueled everything in 2008, including the hedge gold, did you know that gold also experienced a huge dip in 2008, despite the fact that it really is an uncorrelated hedge why happened that gold is supposed to be the hedge? I mean Gold probably dipped because you know a multitude of reasons, you probably know there is fear and negativity in the air in 2008 maybe some people needed money maybe hedge funds managed their money in general i think it was because there was a lot of fear and negativity in the world right now, but guess what gold is a hedge that passed a few months and gold went right back up and you know the year was over and it went right back up and free quickly gold rose higher than ever so the point is that even hedges are prone to massive sellout so hopefully like gold in 2008 hopefully we will see bitcoin backup collecting and I don't just think Ari Paul is the chief investment officer by the way from an investment firm and he thinks something similar, he says he says I have had a very simple mental model for Bitcoin in a serious stock selloff that is has literally been looking at gold on the way to and out of the 2008 financial crisis since 2006. I think this is Bitcoin this time and that's what I think.