Are Bitcoin and Ethereum very volatile? Netflix shows its own “FAANGS” and makes it look friendly

In all my years HODLing $BTC and $ETH, I’ve had my fair share of volatility. However, I’ve never had such a bleak day as the one experienced by Netflix contributors yesterday. Netflix’s stock price (in NFLX USD) fell more than 35% in just one trading session as the company reported that it lost hundreds of thousands of subscribers in the first quarter of 2022.

Netflix has been a WallStreet favorite for years and is included in the acronym FAANG which is an acronym for a group of tech stocks including:

  • Meta ($FB) (formerly Facebook)
  • Amazon (AMZN dollars)
  • Apple ($AAPL)
  • Netflix ($NFLX)
  • Alphabet ($GOOG)

These stocks could not make a mistake during the last bullish cycle in the US stock market which was one of the longest in history.


See also: Explainer: 5 Key Differences Between Cryptocurrency Trading and Stock Trading


When investors begin to take a “no-risk” approach to their portfolios due to current macroeconomic conditions, technology stocks and other assets that are considered “risky” assets are thoroughly vetted and dumped quickly based on the slightest idea of ​​future revenue or that growth is at risk.

This is exactly what happened to Netflix as it erased $54 billion from market value in a matter of hours.

Netflix stock market downturn in April 2022

This results in Netflix losing roughly 70% of the ATH it saw in November 2021 when it touched $700. Drops in stock prices like this make me remember that BTC and ETH aren’t volatile after all, with Bitcoin dropping about 40% from ATH.

As a HODLer, I find comfort in knowing that one trait that BTC and ETH owners possess that most traditional shareholders do not possess is the spirit of loyalty and idealism.

In short, the spirit of Bitcoin, which is the precursor to all cryptocurrencies, is rooted in the philosophy of cypherpunk because they were the first to adopt BTC. This philosophy is deeply concerned with privacy in a world where privacy is a rapidly disappearing luxury.

Cypherpunks also deeply distrust current forces that include big tech, government, and financial institutions… in the extreme, they are promoting crypto chaos that most bitcoin holders in today’s world don’t subscribe to. In the current spectrum of BTC holders, Cypherpunks are now a small minority but their influence and rebellious tone have taken root in the spirit of crypto holders albeit to a much lesser degree.

The average bitcoin holder today is not satisfied with the current system but does not want to get rid of it completely. They aspire to help and reform the current authorities to make them more transparent and fair for all. If some older organization needs a complete overhaul, that’s okay too. They believe that blockchain technology can provide profound improvements in many areas of our societies and daily lives, if allowed to do so, without having to sacrifice privacy.

In this regard, holding bitcoin is a peaceful way to protest abuses of financial and economic power, and at the same time, it refers to the current forces of finding better solutions in other areas as well as taking advantage of the massive computational power we currently have by using the flexibility that contracts provide. Smart as evidenced by the exponentially growing use cases on ETH in the areas of Decentralized Finance (DeFi), DAOs, NFTs, etc.

These deeply held ideals are not found among Netflix contributors, for example.

When it comes to most stocks, top institutional investors do their own analysis and make their calls. If a stock is not performing according to their metrics, there are many other stocks to own and they will sell that stock quickly without the slightest sense of correlation.

In fact, getting stuck in a stock is a ridiculous crash that can cost you a lot of money in the eyes of large institutional investors.

In 2021, we saw a rise in the number of institutional investors in the crypto space, but they still represented less than 10% of the total holdings by most estimates.

Institutions generally treat BTC and ETH like any other risky asset, and as their presence in the crypto space grows, the high correlation with tech stocks can continue. On the other hand, the HODLing ideology of retail investors and the battle cry of BTC and ETH extremists, enthusiasts, and owners are laying a solid grounding for BTC and ETH when their prices collapse.

When the price drops significantly, real HODLers see an opportunity to buy more cryptocurrencies at a discount and know that the price will eventually rise again. Now, we know that cryptocurrency is unstoppable and continues to strengthen its fundamentals. We now have exceptions on the institutional side with the likes of Microstrategy and Tesla proving to be embracing the ethos of HODLing BTC on their balance sheets.

A recent article published on Glassnode on April 19, 2022, separates the entire BTC cluster into two distinct clusters:

  • Short term carrier (STH)
  • Long Term Carriers (LTH)

According to Glassnode, the long-term holders of Bitcoin are those who have held BTC for longer than 5 months. A market review from Genesis, published in February 2022, showed that 80% of BTC holders are in fact LTH.

This is what Glassnode had to say about LTH’s behavior:

These investors have endured significant volatility, yet they continue to hold out. This supports the idea that these investors are a group that is relatively insensitive to price, and remains the least susceptible to selling-side pressure.”

– glass

The ultimate long-term owner of all time is, of course, the elusive Satoshi Nakamoto with a stock of about 1.1 million BTC that has never moved since he was originally mined at the start of BTC.

Since then, the price of Bitcoin has seen sharp declines of 90% of ATHs. Many stocks experiencing this harsh weather will never return to set a new ATH, but BTC and ETH have done so many times in a relatively short period of time.

but how?

One reason can be attributed to the HODL mentality where the ideals and long-term vision fade elsewhere in the investment world.

Stocks live for the next quarter. Bitcoin and Ethereum don’t care as much about the next quarter as they do the next decade and beyond because the vision is broader.


References: February-as-bitcoin-decouples-from-traditional-market/ February-2022-monthly.pdf


Suggestions for readingAn introductory guide to quantitative/computational trading in crypto


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