{"id":19941,"date":"2025-03-31T19:17:21","date_gmt":"2025-03-31T19:17:21","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=19941"},"modified":"2025-03-31T19:17:21","modified_gmt":"2025-03-31T19:17:21","slug":"bitcoin-headed-below-60k-says-hot-handed-crypto-hedge-fund-manager","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=19941","title":{"rendered":"Bitcoin Headed Below $60K Says Hot-Handed Crypto Hedge Fund Manager"},"content":{"rendered":"
\n

Bitcoin\u2019s correction may just be getting started. In fact, the crypto sector as a whole could be facing a severe downtrend reminiscent of 2022.<\/p>\n

\u201cI could see us going back to a five handle by the end of the year,\u201d Quinn Thompson, founder of crypto hedge fund Lekker Capital, told CoinDesk in an interview. A “five handle,” i.e. a price between $50,000 and $59,999, would be down substantially from the already shaky current $83,000 level and roughly a 50% decline from bitcoin’s peak just above $109,000 just more than two months ago.<\/p>\n

\u201cI don’t think it happens quickly, which is why it would be very painful and shocking to people because nothing about the current market conditions is very volatile, with big liquidations and crashes,\u201d Thompson added. \u201cIt’s this sort of different market environment, a slow grind down that is almost more unbearable for people because they’re like, \u2018Is it over? Is the bottom in?\u2019\u201d<\/p>\n

Thompson, who had been bearish<\/a> from far higher levels, has repeatedly called the White House\u2019s crypto announcements \u2014 be it the Sovereign Wealth Fund or Strategic Bitcoin Reserve, or anything in-between \u2014 “nothingburgers” and \u201csell the news\u201d events. He has also argued<\/a> that Strategy\u2019s (MSTR) constant bitcoin buys aren\u2019t necessarily bullish for the cryptocurrency, since they seem to be the only significant bid.<\/p>\n

The economy\u2019s four headwinds<\/h2>\n

Central to Thompson\u2019s thesis is the idea that the Trump administration\u2019s various policies will likely hurt the economy for the next six to nine months.<\/p>\n

First, the Department of Government Efficiency (D.O.G.E), in its efforts to reduce the U.S. deficit, is bent on cutting government spending \u2014 which has been one of the largest drivers of job growth in recent years. The labour market was already wobbly when the Biden team handed over the reins to Trump, Thompson said, and the new government\u2019s fiscal arm isn\u2019t interested in propping things up anymore.<\/p>\n

\u201cPeople get caught up in the politics of it,\u201d Thompson said. \u201cWe can disagree on whether we need the Department of Education or not. But those dollars were being printed and going into people’s pockets, and those people spent them, and went on vacation and to the grocery store. So it was growth positive.\u201d<\/p>\n

Elon Musk, the main force behind D.O.G.E, said<\/a> last week that he was aiming to cut $1 trillion in government spending by the end of May; he also said he wanted to cut 15% of the government\u2019s annual spending, meaning almost $7 trillion.<\/p>\n

Even if D.O.G.E fails its stated objective and only manages to cut, say, a hundred billion over the course of four years, the bigger cuts are likely to occur at the beginning of Trump\u2019s term, not the end, Thompson argued. This means that D.O.G.E\u2019s impact on the economy and consumer sentiment is likely to be felt in the coming months, no matter whether the agency actually succeeds or not.<\/p>\n

Second, the crackdown on illegal immigration at the southern border \u2014 combined with the renewed emphasis on deportations \u2014 is bound to affect the labour market, Thompson said. Migration is growth positive because it puts pressure on wages; if that labour pool dries up, workers will demand higher salaries, which some businesses won\u2019t be able to afford.<\/p>\n

Thompson\u2019s third issue is tariffs. The Trump administration keeps changing up<\/a> its tariff threats on a day-to-day basis, sometimes promising new ones, sometimes calling them off, creating doubt as to whether the majority of proposed tariffs will actually ever go into effect. But the important thing about tariffs is that they create uncertainty for businesses, which may elect to delay investment or hiring decisions until the tariff situation is resolved.<\/p>\n

Finally, the Federal Reserve doesn\u2019t seem to be in a hurry to loosen<\/a> financial conditions because inflation data hasn\u2019t been great. The U.S. central bank cut interest by a full percentage point at the end of 2024, to 4.25%-4.5%, and even that wasn\u2019t enough to push bitcoin above $110,000. Thompson says he expects the Fed to cut anywhere between 25 and 75 basis points in 2025, but that these cuts will be spread out in the second half of the year.<\/p>\n

\u201cI think there’s a lot more coordination going on between the Treasury and the Fed than people want to believe,\u201d Thompson said. \u201cPeople thought Trump and [Fed chair] Powell would be bickering, but they\u2019re actually kind of on the same team right now. [Secretary of Treasury] Bessent and Trump are bringing growth down, and that helps Powell achieve lower inflation.\u201d<\/p>\n

When will the bottom be?<\/h2>\n

With such headwinds working against risk-on assets like stocks and bitcoin, the crypto sector is unlikely to have a good year, Thompson said. The fact that the White House doesn\u2019t seem overly concerned about a potential recession is also a strong signal, he said.<\/p>\n

\u201cBessent is coming in saying, \u2018We need to right the ship.\u2019 And righting the ship means cutting off the juice that was powering these crazy asset prices. The direct result of their policies working is a lower stock market,\u201d Thompson said.<\/p>\n

But how long is Trump likely to maintain course? Until it becomes too painful and even Trump\u2019s political base tells him to cut it out, or until the beginning of 2026 \u2014 you can\u2019t be pushing a country into a recession with midterm elections coming up.<\/p>\n

\u201cI equate this to a controlled burn. They\u2019re trying to purposefully clear the brush so that it doesn’t become a bigger problem. But sometimes controlled burns become forest fires,\u201d Thompson said. \u201cI think it’s going to be a long kind of slog through the year as they try to enact these policies.\u201d<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Bitcoin\u2019s correction may just be getting started. In fact, the crypto sector as a whole could be facing a severe downtrend reminiscent of 2022. \u201cI could see us going back to a five handle by the end of the year,\u201d Quinn Thompson, founder of crypto hedge fund Lekker Capital, told CoinDesk in an interview. A […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":0,"footnotes":""},"categories":[2],"tags":[3,4,5],"class_list":["post-19941","post","type-post","status-publish","format-standard","hentry","category-news","tag-crypto","tag-doge","tag-news"],"_links":{"self":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/19941","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=19941"}],"version-history":[{"count":0,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/19941\/revisions"}],"wp:attachment":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=19941"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=19941"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=19941"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}