The TIE’s Joshua Frank on why long-term Bitcoin predictions are BS

If you’ve been in the Bitcoin game long enough, you probably wake to new price targets daily, each more outrageous than the last one.

But Bitcoin somehow manages to meet, and exceed, those ever since its inception back in 2008. The asset went from being worth a penny to a dollar to hundreds of dollars and trades at $19,000 as of today. These days, industry observers say Bitcoin is primed to reach hundreds of dollars, with the ultimate prediction being that of a million dollars per BTC!

However, not everyone is sold on the bullish price targets. These include Joshua Frank, founder of crypto sentiment and analytics tool The TIE, who believes long-term predictions are mere luck and that solid, verifiable data is the way to go while trying to put a price target on Bitcoin (or any other cryptocurrencies).

For the uninitiated, The TIE is a premier provider of alternative data for digital assets. It offers trusted and transparent data solutions that power the investment decisions of leading hedge funds, family offices, and tokens issuers and also provides research tools for publications such as ourselves.

Frank is also this week’s guest on the crypto edutainment channel Cryptonites, where he sat down with host Alex Fazel to discuss the crypto market, price predictions, and why the burgeoning DeFi market leaves much to desire.

Here’s what they said.

Why fundamentals hold little promise for crypto investing

As a little primer, Frank said that sentiment indications are a different beast than quantitative indicators — which track price and volume — as they provide an accurate view of how positive (or negative) the general consensus among investors is about a particular cryptocurrency. This includes, but is not limited to, information from Twitter, press releases, regulatory impacts, news mentions, hype, and trading dominance.

Such data, when used alongside technical tools, can help power better investment decisions, explained Frank.

“If you can see a little bit into this market, that’s a whole lot more than anybody else,” said Frank.

He added about how crypto investors benefit from curated sentiment data, “It’s mostly just disorganized. So trying to stay on top of the most critical market-moving information was almost impossible. So we built technology that goes out to thousands and thousands of sources and basically scrapes or pulls information from those sources in real-time.”

That said, Frank noted that inherent fundamentals could be a misguided narrative in the current market. “The fundamentals of Bitcoin are supply and demand, right? And Uniswap potentially has some different fundamentals because, you know, token holders can receive some sort of rewards,” he said.

Frank added:

“But broadly speaking, there are no widely accepted fundamentals for crypto. And I think it’s sorely misguided to think that there are because every single person would have a different answer. And if everyone has a different answer, nobody can be right.”

On why DeFi and NFTs resemble IEO and ICO trends

Frank touched on the massive, billion-dollar hype that has taken DeFi from a niche to a formidable sub-industry in crypto. However, he cautioned that as crypto remains a narrative-driven industry, there’s a good chance for DeFi to not reach the levels that its proponents position it for.

That said, he stated that the DeFi market still shows some signs of being much more sustainable than previous hypes. “It seems like there are some really interesting developments in DeFi Like the idea of automated market-makers seems to me to be pretty interesting,” said Frank.

He added:

“There are other developments, in DeFI which I find to be interesting, but there’s also just the notion of; Hey, this reminds me of a lot of things that we’ve seen in the past.”

Frank noted that risk management remains poor among crypto investors. “I think people are just not quantifying the risks of these platforms. I mean, we saw just the other day, we had five DeFi hacks in Q1 and another DeFi project hacked [last week].”

“We haven’t seen any sort of mainstream enthusiasm. And if you look at the number of wallet addresses that are interacting with these decentralized protocols, it tends to be a very small number. I mean, if you look at like, dYdX, they have like 500 users,” Frank stated.

What’s in store for crypto for 2021?

Despite his critical view (a welcome sign that the usual narratives that most crypto executives seem to hold), Frank holds a rather favorable view of the market moving on into the next year — with institutional adoption at the center of that.

“I think as the mainstream media starts to talk about Bitcoin more and we have data on that and we’ve started to see it pick up a bit more and more as we’ve gotten closer and closer, I think once we get to 18 and then $19,000, that’s when you start seeing, I mean, I don’t know if you remember in 2017 Bitcoin ticker was on CNBC.”

“When that comes back, that’s when the euphoria comes back. That’s what I’m excited about seeing,” he ended.

(The above is part of an expansive interview that has been heavily edited for clarity and brevity. The entire video is available for streaming right below!)

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