Andrew Kang, the well-known millionaire crypto trader and co-founder of Mechanism Capital, forecasted a multi-billion dollar crash in the crypto market before memecoins make a significant comeback.
Prepare for Crypto Crash, Says Kang
In a recent post on X, Kang pointed to a combination of Bitcoin sell pressure from Germany, Mt. Gox, and Bitcoin ETFs as factors likely to break Bitcoin’s current price support levels.
“The only buyers seem to be leverage and short-term traders knife-catching,” Kang wrote. “These moves typically result in a multi-billion dollar cascade.”
Bitcoin has experienced a 10% decline over the past month, dropping another 6.5% on Monday to fall below $60,000 per coin. According to Coinglass, the broader crypto market has endured $314 million in liquidations over the past 24 hours due to the increased volatility.
Mt. Gox Repayments and Market Panic
Part of the market’s panic is linked to the announcement that Mt. Gox will begin repaying customers their 141,686 BTC ($8.62 billion) held by the rehabilitation trustee. Many speculate that once these customers receive their Bitcoin, they will sell en masse, potentially causing Bitcoin’s price to plummet.
Kang also highlighted that Ethereum might be even more overheated, with ETH open interest on centralized exchanges now at $13.5 billion, which is over half of Bitcoin’s $23.7 billion figure, despite ETH’s market cap being just one-third the size of BTC.
“It’s running hot, especially considering $BTC leverage is quite high alone,” he said.
Kang noted that Nvidia (NVDA) – the chip producer whose stock has soared 149% year to date – is “looking like a local top” after falling 9.4% over the past week.
“Things don’t go up in a straight line forever,” he added. “We’ve had 9 months of up only. Corrections are normal and healthy.”
Meme Coins Will Still Prevail
Despite the anticipated market pullback, Kang remains confident that meme coins will make a robust return.
“Things are already in motion for a doge ETF,” he noted.
His prediction aligns with BitMEX co-founder Arthur Hayes, who suggested earlier this month that creating a meme coin ETF is a “high market cap thing” that traditional financial firms would eagerly pursue.
In early April, Kang published an essay on “culture coins,” describing them as a new class of memecoins that “embody the beliefs of real-world communities with shared values, identities, lifestyles, political views.” Examples he cited include TRUMP, BODEN, MOUTAI, and ZYN.
Kang’s insights underscore a belief in the cyclical nature of crypto markets, where even in the face of significant corrections, there are opportunities for certain sectors, like meme coins, to thrive and rebound.
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