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BitBoy Crypto founder: 'I would run very far away' from Luna 2.0 stablecoin

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BitBoy Crypto Founder Ben Armstrong sits down with Yahoo Finance Live to discuss the launch of the Luna 2.0 stablecoin following the crash in the Terra ecosystem, the outlook on bitcoin's pricing, and the cryptocurrency environment.

Video Transcript

SEANA SMITH: Facebook's transformation to Meta will be complete on June 9. Meta Platforms announcing it will finally change its stock ticker on that day to META. Now the company formerly known as Facebook changed its name back in October. And at that time, it said the ticker would be MVRS. M-E-T-A, Meta, makes it a lot easier for everyone. Now the stock has been hammered since the company changed its name, down more than 40% on the year. And you can see it today closing just above $193 a share.

DAVE BRIGGS: All right, we're watching crypto. Bitcoin prices jumping, hovering around $31,000. And our next guest thinks it will go a lot higher. Joining us now is BitBoy Crypto founder, Ben Armstrong. Ben, good to see you. Let's start with the crash that we've seen in recent weeks, in particular, Terra Luna. $40 billion wiped out in what was a so-called stablecoin. What did we learn from that?

BEN ARMSTRONG: Well, one thing we learned is when it comes to stablecoins, algorithmic stablecoins, which are tied to the tokenomics and supply of the coin, they're dangerous. And we have not seen one work yet. And we haven't seen one that's been beneficial for people to put money into. I mean, everybody that had money in Terra Luna or in the stablecoin UST, they pretty much lost everything. And it's why it's great to be diversified, so one coin can't destroy your portfolio. But it was really unprecedented with what we saw.

I think something else we can look at here is to say that, well, this can happen to Terra Luna. You know, what vulnerabilities do other crypto projects have? And I think really taking a hard look at what's in your portfolio and trying to figure out, what may be too speculative, I think it's a good practice to go through.

SEANA SMITH: So, Ben, then we have Terra Luna 2.0. Would you be avoiding that then at this point?

BEN ARMSTRONG: Yeah, for sure. Yeah, I would run very far away from anything that has the Terra name attached to it. There's just not going to be the confidence in it again. Because how safe can someone feel in Terra Luna? Even if the price goes up, it's not a coin that you will feel comfortable in because of what's happened. We know Do Kwon. I don't think he's a bad guy. I don't think this was intentional. But I think he's shown that he's been egotistical to a point to where even though criticisms of his project were brought up, he just assumed everything would be OK.

And in fact, whether this was intentional by BlackRock and Citadel or not, if there was a vulnerability, it was always going to be exploited. So I think that he really made a lot of mistakes. He got his head a little bit too big. He became a one-man marketing machine. And, you know, I think any time we're laying the hype drive the price, we get into dangerous territory.

DAVE BRIGGS: Ben, as I'm just trying to learn about this crypto space, it's being drilled into my head. Is this a hedge against inflation? Then on the face of inflation, a trillion dollars of crypto wiped out in six weeks. $250 billion in 24 hours. It is clearly not a hedge against inflation. What is it?

BEN ARMSTRONG: Well, I think it depends on how you look at it because if you look at the beginning of Bitcoin to now, like, you can make argument it definitely is. Right now, we're at the point in Bitcoin's four-year cycle to where we should be in a bear market. And prices should be going down. I mean, historically, it points to a $10,000 Bitcoin. Now, I don't know if we're going to get that low. But I think definitely challenging the lower 20s will be something that we will do here probably between now and November.

And I think that when it comes to talking about is Bitcoin a hedge, I mean, look, if you look at the price of gold, the price of gold, if there's a collapse or a recession, the price of gold generally tends to drop as well. So I don't think there's an asset out there that is 100% inflation-proof, that's 100% a hedge. We're always going to see things move with the overall markets. But I think what's really important to understand with Bitcoin is, it's shown an ability to outperform the rest of the market for a considerable part of its life. And that is cyclical, so we see it every four years.

Right now, Bitcoin should be dropping. 2024, end of 2024, we should see Bitcoin probably hitting all-time highs again, somewhere around that time. So it's going to be a long road to get there. But Bitcoin tends to bounce back further and harder than other assets coming out of the crash. So it's definitely something to watch. If this recession ends at some point, maybe 12, 18 months, watch for Bitcoin to bounce back much harder.

SEANA SMITH: So, Ben, you're even more bullish than that on Bitcoin because there is a recent tweet that you put out that I want to pull up, if we can. You said that Bitcoin is going to hit $1 million per coin by 2023. You went on to say that Bitcoin would become the world reserve currency around 2075 and that Ether is going to pass Bitcoin in market cap by 2030. What needs to happen in order for us-- so let's just start with number one. In order for us to-- for Bitcoin to hit a million dollars per coin, what needs to happen?

BEN ARMSTRONG: Well, Bitcoin just needs to continue on the process it's on, you know, on the journey it's on, which is, every four years, we get the production of Bitcoin cut literally in half. We're going to see more adoption of Bitcoin, but not necessarily adoption as, like, legal tender. We're going to see more regulation that's Bitcoin-friendly, I believe.

The talk of Bitcoin is against the environment. That's going to fade away, as it actually creates a lot more renewable energy sources. I was just with a Bitcoin mining company that used to be an environmental company. They believe that Bitcoin is actually the key to the future of the environment, which is quite interesting.

And what you have to understand is, as that-- or as the circulation of Bitcoin, the daily supply is being cut in half every four years, that has a huge compound effect on the market. It causes a supply shock with the miners. And as long as that keeps happening, the price of Bitcoin will keep going up because it's just simple supply and demand. We have less incoming supply. And we are already seeing institutional demand. When retail demand gets really high, that's when we see price spikes.

So I think as long as we can continue to see those things happen, then Bitcoin is going to continue up to a point. The 2036 for Bitcoin to hit a million actually may be conservative. Cathie Wood says by 2030. But I'd rather be on the conservative side of it. I just don't see any way that Bitcoin does not hit seven figures in the next 15 years.

DAVE BRIGGS: Ben, when the ordinary investor googles crypto and Bitcoin, they find dozens, hundreds, thousands of scams, frauds, and an article in "The Wall Street Journal" about rampant insider trading in the crypto space. What do you tell that investor?

BEN ARMSTRONG: Well, number one, what I'd do, where do you think insider trade started? Number one, you can't really say insider trading without there being regulation. I think insider trading in crypto today, it's more of a moral and ethical dilemma. Like, do you do it, do you not? We certainly would never participate in that because we believe in doing things morally and ethically.

From a legal standpoint, we don't really have the regulation to say what insider trading is or is not in security-- or in crypto. They can't even decide what a security is. So I think a lot of this is on the SEC to actually do their job and come up with a regulatory framework and tell us what cryptos do you believe are securities, which ones are not. And I think that that will allow the space to really flourish.

But I think whenever you're looking at scams in crypto, you just have to be really careful because there are a lot of scams out there. And I think the things that are the easiest shortcuts to making the most amount of money, those should really be red flags. If you look at Terra Luna with their UST, saying it was 18% to 20% you were earning back on that, that's not really sustainable. If it was 5% or 6%, maybe. 16% to 18% or 20%, that's probably too high. It's probably-- I don't want to call it a Ponzi scheme, but those numbers are unsustainable.

So I think you just have to look for what's realistic in crypto. And I think when you're looking into coins to invest in, you really need to be looking at the top coins, especially right now in a bear market. It's not time to try to find 100x coins until we find-- until Bitcoin finds a bottom. Then you might be looking at more speculative assets for the next bull run.

But I think as long as you're accumulating what we consider to be blue chips, whether it's XRP-- they do have an ongoing lawsuit with the SEC-- Cardano, Ethereum, Bitcoin, Sandbox, FDT, CRO, those are coins that we really like for the long-term. And we do hold all those coins in our portfolio. But those are ones to really be looking at. You can't start chasing short-term gains in crypto right now.

DAVE BRIGGS: Indeed, that is true. Ben Armstrong, BitBoy Crypto co-founder, really appreciate you coming on with us. Thank you, sir.