Want to know where the crypto market goes from here? Barry Silbert, a power player in the digital-asset sector, says that investors ought to look no further than the stock market, in a Sunday-night tweet amid a downturn in digital assets.
Silbert’s comments came as bitcoin
and alternative assets such as dogecoin
were in the midst of a turbulent weekend of trading that saw all three of those cryptocurrencies shed at least 50% from recent peaks at their Sunday nadirs.
See: Bitcoin prices tumble 50% from peak and Mark Cuban calls the crypto crash the ‘great unwind’
CoinDesk reported that some of the turmoil being experienced in digital assets was linked to China’s crackdown on the sector. Specifically, the crypto-focused website reported that crypto exchange Huobi may be scaling back some of its offerings and suspended some of its miner-hosting services in some countries due to the Chinese government’s hard-line stance on virtual currencies.
Read: Why is crypto crashing? Will bitcoin prices ever recover? Here’s what traders and investors say
Still, a number of market participants have tried to suggest that crypto’s recent slump has less to do with the fundamentals of digital assets, or the changing narrative and regulatory landscape, and more to do with Wall Street’s appetite for speculation.
In this case, Silbert is suggesting that stocks may be the key indicator for how much risk investors can stomach in crypto, and not the other way around.
Last Sunday, Mott Capital’s Michael Kramer said in a blog post that bitcoin’s recent breakdown could signal risk appetite on Wall Street is in transition —presumably in a bearish direction.
Silbert is considered a luminary in the world of digital assets, after founding two of the most widely known enterprises in crypto: Grayscale Investments, which runs the popular Grayscale Bitcoin Trust
and the Digital Currency Group, which also owns CoinDesk. He’s also been an early investor in companies such as trading platform Coinbase Global
and Ripple, a blockchain-focused startup behind the cryptocurrency XRP
CoinTelegraph ranks Silbert the fifth-most important person in decentralized digital assets.
He also knows a thing or two about equities: Second Market, a popular trading exchange for private-company stock that he founded in 2004, was sold to Nasdaq Inc.
in 2015 for an undisclosed sum.
His view that stocks may be influencing crypto may have more to do with how much borrowed money is swirling around in equities, and how institutions that are newly invested in bitcoin react to this current slump.
MarketWatch sister publication Barron’s reported that Tesla…