- Tony Greer, an ex-Goldman commodities trader, runs the independent research firm TG Macro.
- Greer lays out what he saw as the 5 sentimental tops of bitcoin when it first broke above $60,000.
- He also breaks down how far the cryptocurrency has to fall for him to get interested in buying.
Over the past year, speculators have flocked into the crypto market where riches are quickly made and lost.
Many traders who are sick of competing with the algorithms of high-frequency trading firms in traditional markets are lured by the abundant opportunities to exploit the inefficiencies in the crypto space. But Tony Greer has been happy to remain a spectator.
However, the ex-Goldman Sachs trader, who had a front-row seat to the boom and bust of the dot-com bubble, couldn’t help pointing out the “five sentimental tops” that he saw in bitcoin (BTC) when the cryptocurrency first broke above $60,000.
But when Greer shared his thoughts on Twitter, he said he was “publicly flayed by the laser eye community” and given the whole “have fun staying poor” treatment.
“I literally had to go through and block about 100 of them just because I get tired with the abuse,” Greer, the founder of the independent research firm TG Macro, said in an interview. “My whole point there in the bitcoin market is I’ve never seen a market where the players in it are angry at the non-players in it for not being in it.”
The trading dynamic is uncharted territory for a veteran Wall Street commodities trader like Greer.
"When you're making money in oil and in gold, you want that to be the best-kept secret on Wall Street. You don't want anybody tampering with your money machine once you feel like you've figured out this commodity," he said. "The bitcoin guys are the opposite. They're not traders, they are hold-on-forever guys, they think that it is a magic carpet ride to wealth, and they have thrown all trading dynamics out the window."
The 5 sentimental tops in bitcoin
As bitcoin traded just above $32,000 on Monday after correcting from its all-time high of $64,000 in April, Greer's call for the five "sentimental tops" in bitcoin has been somewhat validated.
He first saw the signs when Elon Musk bought up $1.5 billion worth of bitcoin in February as a treasury reserve asset for Tesla, which would also accept bitcoin as payment. Musk later backtracked on the payment decision.
Then came the mind-shattering episode where digital artist Beeple sold a piece of non-fungible token art for more than $69 million through Christie's in March. He saw the froth escalate as crypto exchange FTX secured the naming rights for the sports stadium that is home to the NBA franchise Miami Heat.
After bitcoin broke above $60,000 for the first time, Greer noticed that all the HODLers put "laser eyes" on their avatars. But everything seemed to have culminated in the public debut of Coinbase (COIN), which surged to over $429 on its first day of trading and saw bitcoin notch a record high above $64,000 on the same day.
"When I added up all of those sentimental topping headlines and I looked at the chart," Greer recalled, "I said I hate to tell you guys but bitcoin hasn't gotten anywhere in 2021. The next thing you know, it breaks down from $60,000 to $30,000."
Weakness ahead and chance to buy the dip
Greer thinks that bitcoin could still break down further and find a bottom somewhere between $20,000 and $30,000 eventually.
"That's an area that, versus where it's been, I would be interested in potentially buying it," he said. "But I want to see some weakness, I want to see a lot of the sentiment get taken out of it."
Greer does not share the view that bitcoin is digital gold, he respects the intellectual capital that has piled into the asset. Specifically, he appreciates the level-headed approach that hedge fund billionaire Paul Tudor Jones and Real Vision founder Raoul Pal have taken to analyzing the space.
"People like that open my eyes to what the value of bitcoin could be and keep it on my radar screen for trade because the thing is liquid and tradable as hell," he said. "So if it feels like it's going to establish a direction for a reason, then let's be in it."