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Now onto Mati.
Hi, Mati.
Hey, Molly.
Hey.
So my first question today about cryptocurrency
has to do with Bitcoin, because Bitcoin this
weekend experienced a pretty significant sell
off which brought in the main currency down,
I think it dropped about $800 to down to $9,000
in a matter of what was seemed like minutes.
So Bitcoin now is down about 30% compared
to its yearly highs.
But, Willy Woo, who's a prominent crypto blogger,
tweeted that the drop in price means that
this is actually the end of Phase 1 of the
bull market, which is driven by FOMO.
And now we're going to see a more stable Phase
2, which is what's going to bring us to $20,000.
So do you agree with Willy Woo's analysis?
Well, I certainly hope so.
I mean, right, that is the wishful thinking.
I mean, you can see, this is a rather nasty
drop.
It's almost 4% in the span of about 20 minutes,
30 minutes.
What was great is that the recovery came even
quicker than the drop, right.
So that we had that sell-off and then price
bounced back.
At the moment, we're about where we were before
that sell-off happened.
What I'd like to do, though, because this
is like really short term price action is
we really need to kind of zoom out and show
where does this put us as far as the long
term trend is concerned.
And at the moment, we're really giving a good
test of that $9,000 psychological support level.
I do believe that, you know, when we have
a support level building up like that, there's
a fairly good chance that we might just step
below it, shake out the last few weak hands.
I've been hearing a lot on group chats that
I that I'm part of and on social media that
people are looking to acquire around $8,500.
So that's basically their, you know, the target
buy level.
So in that case, if that is the case, then
we still could see a little bit more on the downside.
Of course, I'd be more than happy to see that
last night's flash crash indicated the end
of it, and then we can continue on up from
here.
Yeah, I hope so, too.
So my next question has to do also with Bitcoin.
So according to data from CoinMetrics, about
3.8 million Bitcoin hasn't moved since 2014,
which is the highest amount of unmoved Bitcoin
in a 5 year period.
And so the researchers themselves interpreted
this as a sign that Bitcoin is increasingly
becoming a store of value, which is why it's
not being moved, which could be a positive sign.
The other side is that this large quantity
of bitcoin that hasn't been moved means that
people are not really using it and therefore
real life adoption is lagging.
So which side of the issue would you follow
on?
So by nature, I would assume that that metric
is designed to rise over time.
And I think that that 3.8 million just gives
us a good benchmark figure for how much of
the current supply is on the side.
So we have 17, approximately 17 million that
have been minted so far.
So if you take out those 3.8 million, you
start to notice the extremely low liquidity
of bitcoin, the limited supply, which is what
gives Bitcoin its value.
So overall, I think that hodling doesn't necessarily
mean lower adoption rates, but actually they're
one and the same when people take some of
that supply off the market, they are using it.
They're using it for its intended purpose
as a store of value.
Yeah, that makes sense to me.
Our next, actually everything's about Bitcoin,
this week almost.
It's all about the Bitcoin.
I mean, it honestly is.
This has to do with the Bank of China, which
is among the biggest state owned banks in
all of China, released in infographics on
its website explaining what bitcoin is, how
it works and if it's valuable.
It's also been reported that China might be
planning to launch its own currency, cryptocurrency.
That would be a competitor to Libra.
So do you think that these two things, the
rumor and then the infographics are signs
that China is more open to cryptocurrency
than before?
Yeah, I mean, and also we had about a week
ago some news where a court in China had upheld
Bitcoin as an asset, meaning that it was protecting
somebody's property rights and saying that
Bitcoin was property.
So I think that overall, I mean, there's a
misconception that China's banned Bitcoin, it hasn't.
What it has banned is ICOs.
And then later on, basically they closed down
all of the BTC/RMB pairs, because they were
worried about Capital Flight using bitcoin.
Overall, I mean, the Bank of China, and they've
said it themselves, are some of the top researchers
on bitcoin.
They've been completely on top of this space
since 2014 and they're quite advanced.
So I'm looking forward to seeing if this infographic
is indeed part of a wider adoption strategy.
I think that that would be quite cool.
There is a recent report by crypto exchange
the San Francisco Open Exchange, SFOX, where
they said that Ethereum might not be considered
an altcoin anymore.
And the report points out that Ethereum shows
a much higher correlation with bitcoin than
the rest of the coins do, which would make
Ethereum, in their words, an asset on its
own terms, much like Bitcoin.
So do you agree or do you disagree with their
findings?
So I'm not sure that they're able to really
redefine the term "altcoin", as far as I know,
the term altcoin means specifically any cryptocurrency
that's not Bitcoin.
So Ethereum definitely falls under that category.
Also, what they were saying about the correlation
doesn't really make much sense to me, because,
if there's a higher correlation between an
asset and bitcoin, that would strengthen the
case for being an alternative to bitcoin,
whereas if it was an asset under its own right,
we would see a lower level of correlation.
All in all, I think that Ethereum is one of
the top altcoins and it has use cases that
Bitcoin simply cannot participate in, such
a smart contract and ICO is a creation of
wealth and a democratized way.
But to just say all of a sudden, out of the
blue, that it's not an altcoin and that it's
a completely different thing, I think that
that's taking things out of context.
I want to say and tell our audience that you're
about to be going on a vacation, if that's right.
That's correct.
Yeah.
So we're gonna miss you over here, but we'll
see you again in September.
Thanks a lot.
Yeah, bye, Mati.
Bye, bye.
While Mati is on vacation, comment below if
you have any suggestions for analysts or traders
you'd also like me to speak with.
