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Many are fearing that the coronavirus and the global instability it has caused will lead to a huge economic recession. BeInCrypto has spoken with Michaël van de Poppe, an Amsterdam-based trader and well-respected analyst on Twitter (@CryptoMichNL), about commodities as safe-haven assets and the implications of the next halving.
BeInCrypto: On your Twitter Bio, you mention that you are a passionate poker player. You are certainly in good company, as many professional players have switched to trading lately. Where do you see the similarities between these two domains?
Michaël van de Poppe: I think they are both about portfolio and risk management, as well as probabilities. In poker, you need to do bankroll management in order to get a sustainable ROI. In crypto, it’s similar to our trading bankroll and we have to apply proper risk management.
The adrenaline kick is also the same. When you a big hand in poker, it feels similar to make a really cool trade. So there are actually many things that are similar in poker and trading.
BeInCrypto: Aside from cryptocurrency, you advise buying commodities. With all the global uncertainty, partly due to the Coronavirus, many savvy investors have flocked to the gold market. Do you think gold can retain its price, or is it already overvalued?
Michaël van de Poppe: I think it’s actually undervalued. If you compare the gold market to the index markets, you will see that gold is actually around the lowest point in the last 60 years, so the valuation of gold, compared to the index is actually very low.
Compared to gold, silver is also on an all-time low, so I think that the commodity markets are undervalued, while the index markets are overvalued.
With the current economic downturn and the global instabilities, I prefer to hold commodities like gold, platinum, and silver, rather than equities. But I’m also bullish for cryptocurrency because I think that it can be one of the big gainers during an economic downturn.
BeInCrypto: In one of your recent Tweets, you plotted silver against the Nasdaq, to which some responded that silver looks exactly like a shitcoin. What’s your take on this?
Michaël van de Poppe: It definitely looks like a shitcoin, but people should realize what the chart is actually telling.
— Artimud (@Artimud) March 3, 2020
The chart provides data on the valuation of silver compared to the equity markets, in this case, Nasdaq. It shows that it’s heavily undervalued, though in 2011 the chart shows an overvaluation where silver reached its all-time high. What the chart tells is me is that our equity markets are way overvalued. As such, I’m expecting a heavy economic downturn to come up, in which commodities will provide a safe-haven and start increasing in price.
BeInCrypto: Bitcoin’s block rewards will be cut by half soon. In the previous two instances, the halvings triggered huge bull runs. Do you think we will see a similar impact in May?
Michaël van de Poppe: I don’t think that we will see an instant impact. We might have a small and short-lived upwards front before the event, as investors are looking to buy the rumors and sell the news. We saw the same in 2016, but the actual effect will take place after the halving.
BeInCrypto: There are lots of predictions going around about the prices Bitcoin will eventually reach in the next two years. Do you want to make your own prediction?
Michaël van de Poppe: I think by the end of 2022, the price of one Bitcoin should be between $75,000 and $125,000, depending on the valuation of the U.S. dollar.
BeInCrypto: Thank you for the interview.
Michaël van de Poppe: No problem. Thank you as well.
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