- Markus Thielen said smart money is still avoiding crypto stocks.
- The 10x Research founder noted that several crypto stocks, such as Circle, Coinbase, and Metaplanet, have undergone steep corrections since June.
- The trend may trickle down to the cryptocurrencies, which may slow or hold off their expected rallies.
Markus Thielen, founder of 10x Research and former Head of Research & Strategy at Matrixport, explained today why “smart money” is not yet making its big move in cryptocurrency stocks. According to him, these stocks have unwound sharply, with the big names within the segment showing drops of as much as 30% to 50% from their all-time highs.
Reason Why Smart Money is Holding Out on Crypto Stocks
The 10x Research founder claimed that crypto stocks have lost momentum but remain overvalued. Additionally, their volatility has narrowed, which has left many bag holders or investors with unrealized losses. The same factor prevents others, particularly smart money or capital from professional or institutional investors, from entering the niche.
Thielen reiterated that his group flashed the warning signs on stocks like Coinbase and Circle in late June. Now comes the realization of their projections.
More Dips Coming Up
What’s worse, the researcher highlighted that they are not just undergoing short-term corrections. The events will likely catalyze a “deeper repricing of crypto’s equity narrative.”
Thielen pointed out that some of the crypto stocks from big companies might continue their dip. Meanwhile, others may already be approaching their high-conviction entry points.
Since the intelligence platform flagged several crypto stocks, prompting their take-profit recommendations two months ago, Kakaopay fell by 28%, Metaplanet dropped by 38%, and Circle slumped by 21%. Thielen opined that retail investors who bought near the top appear to be sitting on steep losses and are holding off their investments until prices eventually recover.
Impact on the Broader Crypto Market
Unfortunately, the trend may trickle down to the actual crypto market. The retail money getting stuck in crypto stocks, preventing them from rotation into tokens, would slow or delay the broader crypto rally amid the bullish sentiment of the digital asset community.
The Crypto Fear & Greed Index is still in the “Greed” zone at 60, based on Alternative’s scale. However, the numbers have significantly fallen from last week’s 73 score, hinting at a waning optimism and likely continuation of a broader price consolidation in the crypto space if the decline persists.
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