A billionaire who foretold the 2022 Bitcoin crash says institutional investors are taking the stage as the markets approach their psychological turning point.
Knowing about the Bitcoin crash, Chamath Palihapitiya says institutional investors are buying the bottoms
Billionaire investor Chamath Palihapitiya correctly predicted the onset of a major crash in global markets. Just one year from now, he claims another milestone is on the way. In a new episode of the All-In Podcast, savvy investors with substantial capital are returning to the markets as this cycle hits bottom, according to Palihapitiya:
In my experience, when there are sales patterns, it’s the algorithms that initially push the market in a certain direction. Then there are hedge funds and more traditional fund complexes that only include long-term assets. The last group typically consists of individual investors. In addition, it works in the opposite way. Now that individuals are selling, corporate capital is once again bottoming out.
Chamath Palihapitiya also shared how the crypto winter, which has been hardened by bad news after another, feels like lately. According to him, initial anger and depression give way to acceptance. When the market rally becomes dominant again, “it’s a really interesting psychological turning point”. Palihapitiya also says that the psychological turning point will be related to the Fed’s rate decisions. He says he expects more hikes in the longer term, so current levels are an opportunity:
I believe the best way to see this is to give the Fed the necessary determination. They will increase the interest rate by another 75 points. If you’re trying to pinpoint when the lowest level was, it’s probably now because rates will likely rise between 4% to 4.50% to 5% in the first quarter. This is why smart money is starting to exit and enter the market.
“A fall is always possible”
Palihapitiya warned that a fall is always possible. However, he sees the relative strength of tech giants like Apple as evidence of a market shift that is already underway:
Every chance people get to claim that they are behind most of the negative news, they take advantage of it and use it as a reason to buy. The fact that we are kind of nearing the end is therefore number one. But secondly, if we see another drop, there’s really only one group of companies that hasn’t been severely affected. Microsoft, Amazon, Apple and Google are participating. Even Facebook has been lumped together with everyone else in these businesses where we’re crushed by 60%, 70%, and 80%.
Morgan Stanley expects 15% rally in Bitcoin price
The crypto market continues to move in correlation with the US stock market. Meanwhile, traders carefully analyze trends in the S&P 500 index to take Bitcoin positions. Now, Morgan Stanley’s CIO and bear market expert Michael J. Wilson said the US stock market could witness a short-term rally of 16%. However, the rally will only happen when there is no gain capitulation or official recession. As you follow on Kriptokoin.com, Bitcoin started the new week above $19,000.
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