- The weeks-long sell-off in cryptocurrencies is continuing as investors dump risk assets.
- Crypto trader Glen Goodman told Insider he remains bearish on the space in the short-term.
- However, he shared four projects he thinks can do well in the longer-term.
- See more stories on Insider’s business page.
The looming debt crisis of Chinese real estate developer Evergrande sent shockwaves through global equity markets early this week. The Hang Seng, S&P 500, and Euro Stoxx 50 all fell at least 2.5% on Monday, before recovering some of their respective losses.
The business’ implosion is understandably worrying to stock market traders – the collapse of such a large firm negatively affects companies it does business with and can create a domino affect, hurting bottom lines and potentially the broader economy.
But according to Glen Goodman, a trader who warned of the 2017 and 2021 bull market tops in bitcoin and who says he profited by more than $100,000 when he bet against financial markets in 2008, Evergrande’s fall is also responsible for further dragging down crypto assets. Bitcoin is down more than 11% since Monday morning, while ethereum is down nearly 13%.
Goodman, author of the book “The Crypto Trader: How anyone can make money trading Bitcoin and other cryptocurrencies,” said investor sentiment in one market can influence another.
“When [investors] sour on stocks because they feel like the world is becoming a more dangerous place for investors, then it’s only natural that they would be scared into selling anything that they see as an investment, and that includes bitcoin and other cryptocurrencies,” Goodman told Insider on Tuesday.
“When they hear news like Evergrande, it scares them and it makes them feel insecure, like their money is at risk,” he continued. “And so it makes them pull money out of investments generally, and that goes for cryptos as well as stocks.”
Given the recent sell-offs, Goodman said he’s keeping his money on the sidelines in the crypto space until prices appear to be in an uptrend again.
4 altcoins for the long-term
While Goodman is bearish on crypto in the near-term, he said he’s bullish on “the entire space” in the long-term because “it’s full of brilliant new inventions.” He highlighted some projects he’s optimistic about.
Goodman likes ethereum because of its position as the basis for many decentralized finance projects and NFTs. It’s currently the most adopted blockchain in the DeFi space. But he warned that some other blockchains threaten to take over its spot.
One of these is Cardano (ADA), which Goodman calls a “better ethereum” because it doesn’t have the high transaction fees that ethereum does. Goodman said he likes the project because of this, but that its success will depend on software developers’ willingness to adopt it over ethereum. If ethereum’s fees remain high, he said, he expects Cardano to benefit.
“Ethereum still has a chance to save itself, but I don’t that chance will last forever,” he said. “These gas fees are high, and if they remain high for too much longer then I think software developers will start to get itchy feet and start moving to other platforms like Cardano.”
Third, Goodman is a fan of COTI (COTI), which he calls a “better version of bitcoin.”
“When I first came across it a few years ago it impressed me because it uses a clever new piece of post-bitcoin type of technology that allows it to scale up way past even the dreams of Visa and Mastercard in terms of the amount of transactions that can be done and so quickly. It could solve the entire world’s payment problems,” he said.
He said COTI’s price would have to rise to $0.50 for him to purchase more of it.
Finally, Goodman is bullish on Audius (AUDIO), a music streaming platform built on blockchain that aims to give artists a bigger share of streaming revenue. He said its price would have to rise to $3.40 for him to buy into it.
While Goodman likes these projects, he stressed that there is always a chance these assets don’t deliver positive returns. Other experts have warned that the furious rally in altcoins this year looks unsustainable as various projects may not end up justifying the valuations they’ve been given.