Stock trader Gareth Soloway has cautioned crypto enthusiasts that hold a bullish outlook for Bitcoin. According to Soloway, Bitcoin needs to display favorable patterns amid speculations of a debt ceiling crisis in order to position itself as an appealing alternative in the event that the United States government defaults on its debt.
Gareth Soloway’s warning was meant to serve as a reminder for crypto investors who consider Bitcoin the de-facto safe-haven asset in times of financial crisis. Speaking to Stansberry Research earlier today, Soloway warned Bitcoin maximalists that the flagship cryptocurrency would have to display bullish price-action like it did during the banking crisis.
The stock trader revealed that if a bigger move is not witnessed in Bitcoin later this month, his outlook for the crypto would get very bearish. Soloway pointed out that a look at BTC’s chart might convey to some that the crypto has hit a bottom. However, the recent surge in crypto market activity, partly due to speculation in memecoins like PEPE, is not indicative of a bottom, according to the trader.
To make the case for a potential bearish trend for Bitcoin, Soloway highlighted the conduct of the U.S. government in anticipation of a potential central bank digital currency (CBDC) launch. The trader believes that such a crypto product issued by the government would call into question the viability of existing dollar-pegged digital assets like Tether USD (USDT) and USD Coin (USDC). The impact might spill over to other leading crypto assets like BTC.
When asked about his outlook on memecoins like PEPE, Gareth Soloway likened it to gambling rather than investment. According to him, the increasing speculation in the crypto market due to memecoins like PEPE is a macro indicator that reveals the warning signs, including the froth in the market. In finance, froth refers to a market condition where an asset’s price begins to increase beyond its intrinsic value.
