Meltem Demirrors, Crucible Capital general partner, and Matt Hougan, Bitwise Asset Management CIO, join 'The Exchange' to discuss what's next for crypto prices following a recent sell-off.

Cryptocurrency markets experienced a significant drop in prices following a large-scale liquidation event, described by experts as a 'cascading liquidation' similar to previous episodes but with notable differences. This time, decentralized finance (DeFi) mechanisms functioned as intended, leading to liquidations that triggered further sell-offs, resulting in approximately $19 billion in liquidations.

While gold has recently outperformed Bitcoin, analysts suggest that the relationship between major cryptocurrencies and altcoins is evolving, with less correlation than in previous years. Institutional investors continue to show interest in gaining exposure to crypto assets, and potential regulatory developments are seen as possible short-term catalysts for the market.

Crypto prices made a sharp move lower recently. Here's why

Let's talk what's next for crypto with our panel, Meltem Demirz, Crucible Capital General Partner, along with Matt Hogan, Bitwise Asset Management CIO. Meltem, can you tell me about last week and exactly what happened on that day? It almost looked like margin selling. What was that from? Leverage is a hell of a drug, Joe. That's that's what I can tell you. What we saw is cascading liquidation 2.0. We saw this in 2022. In 2022, it was borrowers that were off chain. This time, DeFi functioned exactly the way it was supposed to. There were some liquidations happening, triggered more liquidations. And we saw a 19 billion dollar liquidation cascade. Again, leverage is a hell of a drug. Matt, meanwhile, gold has, at least in recent sessions or recent months, has proven itself as non-correlated. Rush to safety, all the things that Bitcoin bulls aspire to for the crypto trade one of these days, it's not here yet. Yeah, I think it's here depending on your time frame, Joe. Yes, Bitcoin has been more volatile than gold. Gold is ahead of it right now. But I think gold is going to drag Bitcoin up. If you pan out over the last year, the debasement trade has been Bitcoin and gold. They've taken turns leading. Gold's ahead right now. But I think we're going to see a strong end of the year. So I wouldn't I wouldn't count Bitcoin out. You can talk about I don't I'm not in a position to understand Solana and some of the other. I mean, when I get done with Ethereum and Bitcoin, you know, then we're in Dogecoin type territory for me. They all move in tandem, though, right? Well, they used to not so much anymore. I think what we're seeing is we used to view the crypto market as sort of one market. Bitcoin dominance rate is still over 50 percent. So historically, things have really moved in tandem. When Bitcoin runs, alts will catch up and we'll see sort of the whole crypto complex run. I think this is the first time this is year 11 in crypto for me that there's no longer one crypto cycle. There's Bitcoin, there's altcoins, Ethereum, Solana, the high caps, and then there's everything else. So I don't think we have the same correlation we saw before. So it's no longer a market beta of one. There's different subsectors in crypto that we got are, you know, got our ETS. We got our institutional, you know, starting to see increasing ownership move in that direction. I don't know. Is there another having what's on the horizon? Maybe maybe some government, maybe finally getting some domestic regulation or clarity on what it's going to look like. Is that what's next for Bitcoin? So for a short term catalyst, for sure. Progress on the Clarity Act in Congress, if we see that, if the government reopens, would be positive for crypto. But the real bull story for crypto is just the slow moving freight train of institutional investment. I've probably done a half dozen meetings with institutional investors and financial advisors over the last two days. None of them talked about what happened over the weekend. None of them talked about the liquidations Meltem talked about. They talked about this need to get exposure to crypto. They're currently on zero. They're going to five percent. That's the big story. It's a slow moving bull market, but it's a very strong long term bull market from my view.

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Breakdown