Lately I’ve been watching a crypto YouTube Channel called UpOnly. It’s run by two experienced crypto traders, Ledger and Cobie.
In April, they hosted a show titled Big Brain Crypto Club. It included some of the top crypto investors and traders in the world. The market was hot, bitcoin was over $50,000, and everyone on the panel was bullish — except for Light, an anonymous professional trader.
Light was extremely bearish — and in hindsight, he was right to be. Since then he’s become a sort of legend on crypto Twitter.
Recently, UpOnly filmed a new episode with Light, Doom & Gloom with Light. He’s still bearish on crypto. The following image is his pinned tweet on Twitter, and he stands by the concept in the new episode, especially as it relates to altcoins.
— light (@lightcrypto) July 10, 2021
In the new episode, he highlights how much prices are still up in altcoins, especially DeFi (decentralized finance). He points out that venture capitalists (VCs) and other early investors in DeFi projects are still up HUGE on their original investments.
Many of the early private investments in token projects are still “locked up.” When you invest early in a reputable crypto project, the coins typically “vest” over time, unlocking over the course of one-to-five years.
Vesting is when a certain amount of tokens are set aside for some period of time for the team, partners, advisors and others who are contributing to the development of the project. The tokens are then released (or “unlocked”) over time.
VCs and other early investors in successful DeFi projects still have billions of dollars worth of coins that will unlock over the coming years. As that additional supply comes to market, Light argues many crypto holders will continue to sell off.
I think it’s important to listen to bearish traders, especially smart ones like Light. I agree that there’s still a lot of froth in the altcoin market. There’s a reason I’m not buying at these levels.
This is why bitcoin forms the majority of my crypto portfolio. I think it has the best catalyst for the next five-to-10 years: the Fed printing ungodly amounts of money and the government spending it and giving it to citizens. There’s no private early investment in bitcoin waiting to be cashed out. Most serious bitcoin investors have a long-term perspective.
I don’t know what will happen to altcoins next. Quality names could do well over the long term, but I am a little concerned about the direction of the market over the short- to mid-term. Needless to say, I missed out on a lot of profits in DeFi and altcoins over the past few years. So I could just be salty about that.
Have a great weekend, everyone.