Cryptocurrencies: has the capitulation taken place?

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Wednesday, May 18, 2022

A complete surrender corresponds to the lowest point... So in theory it's an opportunity to do some good business.

Any experienced investor will tell you that the best time to invest is after you have 'surrendered'. In military terms, to capitulate is to surrender, to leave control of the battlefield to your opponent. In finance, capitulation occurs when investors abandon the market en masse and precipitately, selling their assets at any price to seek refuge elsewhere. Theoretically, a complete capitulation corresponds to the lowest point... So in theory it's an opportunity to make some bargains because the price can, in theory, only go back up (if the asset isn't dead of course 😂 ).

Last week saw a big thrill with the collapse of UST, the third stablecoin on the market. The bitcoin price lost 26% in the space of a few hours until it hit $25,000, a level it hadn't reached since December 2020 (giving us a nice -64% since November's record high of $69,000). You only have to go to the social networks to see the damage....

The bitcoin price since the end of 2017:

At the same time, the number of NFT transactions is falling and US investment bank Morgan Stanley is predicting a depreciation in the value of virtual land acquired in metaverses. That sounds a lot like capitulation, doesn't it?

At least that's what Mathieu Jamar thinks. For this asset manager at Belgian crypto fund DCY, "there was clearly a capitulation on the markets last week, so it's entirely possible that we've marked a low for a while, but it's still hard to say whether this level will be the last capitulation." What, wait, there may be more than one capitulation?

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This analysis is not investment advice. It has been prepared without taking into account your personal situation, particularly your financial situation, risk profile, and investment objectives.

Before investing in any product, investors should fully understand the risks involved and consult their own legal, tax, financial, and accounting advisors.

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