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Interview with Crypto Analyst Carl the Moon about Economics, Trading Strategy, and Next Bitcoin ATH

Tue, 3/03/2020 - 15:45
Interview with Crypto Analyst Carl the Moon about Economics, Trading Strategy, and Next Bitcoin ATH
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What many people in the industry are really eager to know is whether or not they should be buying cryptocurrencies to trade or invest in, what rules they should follow to become successful doing it, and the most important question for newbies: where to start. I asked one of the most popular YouTube Analysts, Carl Eric Martin from The Moon channel, all of these questions and he told me about his view on the current financial system, what his investment portfolio consists of, and why it’s highly possible that Bitcoin will hit $20,000 by the end of this year.



U.Today: Hey Carl, it's great to see you. First of all, how did you get this many views? Your YouTube channel seems to be very popular. How long have you been in this space? 

Carl: First of all, I think that the simple fact that I upload one video every single day shows YouTube that I am consistent and that I am serious about my channel and this triggers the algorithm to push my videos further and further. When I started, it was, of course, a very small YouTube channel, but I uploaded a lot of videos and I used many different SEO tactics (search engine optimization).

U.Today: When did you start it?

Carl: I started the channel somewhere in 2018 but I started to get really serious in 2019, and that's when I really started to make one video every single day. Ever since, it has just taken off. 

U.Today: Why did you decide to become a crypto trader? 

Carl: I've always had an interest in monetary policy, in economics, macroeconomics. I loved to research the current monetary system, basically. I've researched the federal reserve system, the banking system and what's bad with it and what could potentially be good with it. Basically, most of it is actually quite bad and that is something that you realize when you research the banking system. There are so many flaws that create problems in the world. So, before I went into crypto and before Bitcoin, I researched all of this stuff and I was into gold. I was investing in gold because of the fact that I believe that gold is a much better form of money than the US dollar. And because of this knowledge, when I heard about Bitcoin, it just made sense immediately to me because basically I already did all of the research that people do when they hear about Bitcoin. So, some people, they do it the other way, they find Bitcoin and then they start doing this research. I was lucky to already have done it and that's why the first time I heard about Bitcoin, I actually immediately thought this is amazing. Ever since I've just researched Bitcoin a lot. 

U.Today: That’s interesting. What about the stock market? Are you experienced in that market as well? 

Carl: What I believe is that when you look at the current markets and the traditional market globally, there have been low interest rates for a very long period of time. So, the interest rates have been artificially held low to prop up the stock markets. This is something that is done. It's basically a manipulation of the market and not only have the interest rates been artificially kept low, but also central banks around the world have been printing huge amounts of money.

We're talking about trillions of dollars that have been printed to basically bail out the banks since 2008 and also more recently we've seen the federal reserve for example, start to print money in what is known as quantitative easing. And quantitative easing is just a very advanced word for printing money. 

We've seen a lot of that happening globally. It's not only in the US, we've seen all central banks, most of the central banks in the world have been printing money, followed by the federal reserve. This leads me to believe that I don't trust the current stock market rally. So, you see it starts taking off like crazy there, creating new all-time highs all the time. But I don't trust those rallies. If you look at the stock market's going up, you can also see that something else that is also going up and creating new ATH’s. It is global debt. So, when you look at tweets from Trump and other world leaders, they are very happy to point out that stock markets are going up, but they are not disclosing that the debt is going up at the exact same speed and they are actually, they are both interconnected, they are cointegrated basically. When a debt goes up or when you print money, lower interest rates increase the purchasing power. What they do is they artificially create this buying power by making it cheap to borrow currency. And that's why we see stocks will just go up and also realistic markets. 

U.Today: But isn't it a good way to make money for yourself personally? 

Carl: Sure. You can trade the stock markets and make money from what the federal reserve is doing. However, personally I am not really doing that because if there was anything I would do, it would probably be short. If we're talking about the bigger swings here, I mean many, many people in the golden community have been looking to short the S&P for example, because they know that something is wrong and eventually it has to correct. But the thing about markets is that, especially when you have a central authority manipulating the market, is that it's extremely unpredictable.

So, the government and central banks are incentivized to keep the stock markets going up. And if you bet on it going down, you will basically lose money. I don't remember who said it, but there's a famous quote saying that the markets can stay irrational much longer than you can stay solvent. 

So, even if you correctly assume or correctly see that the market is going in the wrong direction and it has to correct, the market can continue to go on an insane rally, unjustified rally longer than you might think. So just shorting based on these fundamentals is not really profitable, actually the exact opposite. Everyone who shorted the S&P in 2015 lost and everyone who shorted the past few months also lost. Even though they are right, fundamentally the S&P and all of these stocks have to correct. It's just insane seeing the PE ratios are off the charts and we're seeing the same discrepancy between prices and fundamentals as back in the dotcom bubble, for example. And eventually, there will be a pop, but let's see. It's impossible to know when it's going to happen. 

U.Today: Are you an investor, Carl? If so, what cryptocurrencies do you invest in and why?

Carl: Yeah, for sure I am a cryptocurrency investor. I would call myself actually a Bitcoin investor. So, for the past two years essentially the only thing I've been holding is Bitcoin in terms of cryptocurrencies. 98, 99% is in Bitcoin. I had some altcoins that I just didn't liquidate. Just to keep it very simple I would say that I own only Bitcoin. Just a couple of months ago when I started to scale back into Ethereum and everyone who follows my YouTube channel, they know that I am basically what some would call a Bitcoin maximalist. I believe in Bitcoin much more than I believe in crypto in general.

I believe that Bitcoin is fundamentally game changing and it's a huge revolution for the world economy and actually the world in general. It's a paradigm shift. 

Seeing money being shifted from a central authority in a decentralized nature, that is something that is extremely important. When it comes to other altcoins and cryptocurrencies, I do believe that there might potentially be very interesting products out there that will change the world in some different aspect or form, but personally I tend to invest in the things that I really understand. I really understand economics, I really understand money, and this means I really understand Bitcoin. And that's why I'm confident in holding a lot of Bitcoin. When it comes to altcoins, the only thing I do there is trades. And that's like maybe a swing trade over a few weeks or over a few days, maybe even an intraday trade, but not for the long term. 

U.Today: But what cryptocurrencies do you consider to be the most promising, apart from Bitcoin? 

Carl: I would have to say Ethereum and that's my list. Bitcoin, Ethereum, and I know that there are competitors out there to Ethereum. But I do believe that the fact that Ethereum has the network effect, it already has a lot of momentum going. Basically I am much more bullish on Bitcoin than I am on Ethereum. Right now I hold approximately 95% Bitcoin or 90% of Bitcoin and somewhere between 5% and 10% of Etherium. I don't think I want to hold more Ethereum than that actually. This Ethereum is actually not even for the very long term. It's more like maybe one year or two years play or something. If Etherium five X is against Bitcoin, I will sell into Bitcoin.

U.Today: Let's check your prediction skills now. How much will Bitcoin cost at the end of 2020?

Carl: The halvening is coming up and the halvening is a very, very important event because the inflation rates will be cut in half. And this is something that happens every four years. And I think that looking back at the previous history, we can see that the two previous halvenings radically pushed the price to the upside. This doesn't necessarily mean that it's going to happen this time. But I do believe that the attention that is going to be put on Bitcoin during the halvening and after the halvening, is going to be huge. And the people are once again going to start talking about the fact that not only are you going to see halving now, but, like I said, every four years until the inflation goes down to zero, and that is a huge deal because a zero inflation rate is something that you don't find anywhere else. Basically, it is the first time we've ever seen this because Bitcoin is digital, and this can only happen in a digital world. So, Bitcoin is something that I would call absolutely scarce. It's not only scarce, it's actually absolutely scarce with this 21 million Bitcoin limit. 

So, all of this, what I just said is exactly what is going to be told in the next few months and maybe even up to the next year. It's hard for me to not be very bullish for June, 2020. I think it's very possible that Bitcoin could reach above $20,000 at the end of this year.

That's very possible. But I am not entirely sure if that's going to happen because, if you were to compare with the previous cycles and you measure from the previous ATH, basically somewhere at the beginning of 2021 is where Bitcoin should go about $20,000. But previous price actions don't necessarily have to accurately predict the future. I am bullish on Bitcoin, I am very confident that Bitcoin will be worth more at the end of this year than it is today. 

U.Today: Sounds great! So, what advice can you give to people who want to become crypto traders? 

Carl: I think that you absolutely have to educate yourself before touching trading at all, before touching altcoins and even before touching Bitcoin. Even though I personally believe in Bitcoin 100%, and I believe that it's going to change the world, I still always tell people before they buy Bitcoin that you have to do your own research and you have to educate yourself. Don't take my word for granted. Don't take anyone's word for granted. Education is the key and knowledge is the key. This is true for Bitcoin, altcoins, and trading. I would basically suggest doing research online, on YouTube, reading books, and make sure that you always have proper risk management. That's extremely important.

In terms of trading, you should never trade with more than 1% of the holdings on your account and your account should never be more than maybe up to a maximum of 5-10% of your total holdings, maybe even less than that. 

I mean, all this is up to every individual, but you need to at least set your own rules and keep them. The same goes for altcoins. Maybe never hold more than 10 altcoins. Choose 10 that you believe in if you believe in them and stick to them. Because if you have 20 or 30 altcoins, it's impossible to keep track of all news and developments. I'm sorry to say it, but if you hold 30 altcoins then I know for sure that you didn't do your research because it's impossible to know that much about 30 altcoins. So, I would say maybe the maximum is five altcoins. Choose the five best that you can find if you even do want to invest in altcoins. Like I said, I don't even do that myself. Short term trades are the maximum I do there. I don't hold them for the long term. What I usually say to people is that I think that every cryptocurrency investor should actually hold at least 80% Bitcoin in their portfolio. That has always been my rule. I hold more Bitcoin in that. I think that's reasonable because the  Bitcoin risk reward ratio is just unique. You cannot find that anywhere else. And of course, altcoins can go 10 X in the next few weeks, but they can also go to zero. So, if you want high potential reward with low risk, then just bet on Bitcoin.


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