00:00Crypto markets are once again under pressure, with prices correcting sharply after a period of optimism.
00:06But this volatility isn't happening in isolation.
00:09We are also seeing swings in equities, bonds and even precious metals.
00:14So the big question today is this, is this just another crypto crash or part of a broader market reset?
00:20To help us navigate this downturn cycle, we're joined by Aaron Tang, General Manager APEC at LUNO.
00:26I want to say thank you very much, Aaron, for joining me.
00:28We can say that crypto has been through multiple boom and bust cycles before.
00:33What triggered this specific downturn and what makes it different from previous ones?
00:39Morning, Nina. Thank you for having me again.
00:42The interesting thing about this price movement this time around is that it is a lot more multi-factor
00:50and the actual price movement has been slightly more gradual.
00:54If you compare versus 2022 or if you compare versus 2018, 2017.
00:59So since the October 2025 peak of about 126,000, we have dropped to about 69,000, 70,000 right now.
01:09So that's a little bit more gradual than previous cycles.
01:12And I think there's several things that are quite different from previous cycles.
01:17So, for example, now crypto digital assets are with a lot more institutions.
01:22So a lot more institutions have crypto and digital assets.
01:25Now, these are many different types of institutions.
01:27So they may include companies like ETFs.
01:31So basically fund managers.
01:33But we also have a bunch of companies who are actively trading in derivatives and so on.
01:39So companies such as those, they will be very, very quick to enter and exit the market because they're trading basically on very, very short time frames.
01:48So that could be potentially one of the differentiation factors between now and previous cycles.
01:54It's also very interesting because we look at how crypto is behaving in a multi-asset world.
02:01So the sharp downturn or the sharp correction in cryptocurrencies, that actually at the start, you could actually see gold and silver moving much higher than cryptocurrency.
02:12So that to us is a signal that at least for the past couple of months, crypto has not been behaving like a hedge against instability or so on.
02:21But rather, it has been treated more like a risk asset, meaning that when people feel that they can take more risk, then they are buying crypto.
02:28However, in the past few months, people have been moving a lot towards perceived as safer assets, such as gold and silver.
02:38And then if you look at the final factor, I think in terms of sentiment, it's actually quite interesting right now that a lot of sentiment has moved to some of the other industries, such as AI.
02:49AI is, of course, on everyone's minds.
02:51And crypto has not actually been on the tip of everyone's tongue.
02:56So I think it's a huge number of factors that are all contributing to this.
03:03I would definitely say that it is more macro factors than a specific happening within the crypto industry itself.
03:11You mentioned that there's more on the macro level on one of the biggest factors is what's happening right now.
03:18And then, is this more about global macro pressures like interest rates and liquidity or crypto-specific factors such as leverage and market sentiments?
03:28What's your thought on this?
03:31Definitely, it's leaning more towards the macro factors.
03:34So, for example, many people were saying that expecting interest rates to come down a little bit faster.
03:40Indeed, President Trump himself has been pushing for interest rates to move down much quicker.
03:47However, interest rates have been maintaining not that many cuts at the moment at the US Fed.
03:53And then, of course, we hear about things like potential instability in the Middle East, for example, the Iran-America challenges there, potential conflicts around the world.
04:04So I think that factors have played a lot of caution into the minds of investors and traders worldwide.
04:13Now, if you look specifically at factors within crypto markets themselves, so if we look at leverage, if we look at are there projects that blew up or are there, for example, big systemic risks within the crypto industry,
04:30we have not actually seen huge companies or large companies, systematically important companies actually have huge problems.
04:39So, again, if I'll go back to 2021, 2022, then we, of course, had a huge crypto exchange like FTX, they blew up, there was a huge amount of fraud happening and so on.
04:51So that actually has not happened in this last couple of months.
04:54And I would say that it's more driven by macro.
04:57Aaron, you also mentioned or share about the sharp turn, downturn with the many factors behind it.
05:04And we're going to focus especially on during downturns.
05:06We know that emotions tend to take over from what you're seeing on the ground.
05:10How are investors reacting right now?
05:12And what are the most common mistakes made during periods like this?
05:16Definitely, we've seen a dip in trading volume because I think investors are worried at the moment.
05:25So a lot of people are taking their time to either sell or hold on or toll on to their capital, right?
05:31Not investing a lot at the moment, not trading a lot.
05:35However, we also do have a segment of customers who are patiently still staying on.
05:41So these are what we call the long-term holders or the long-term hodlers.
05:46So they basically, even in the events of market volatility, they are maintaining their crypto investments because they are investing more for the long term.
05:56So I think a couple of common mistakes that investors make during these kind of phases is panic selling.
06:03So panic selling, I think, is when you let the emotions take over you and then you sell perhaps out of your original investment plan.
06:10So for example, maybe your original investment plan was, you know, I would like to hold for five years or so on.
06:16But because of market sentiments, investors may sell too early.
06:21The other thing that investors may often do is over leveraging.
06:26So in the crypto markets, not so much in the local crypto markets, but if you were to use offshore platforms and so on, you could get leverage to invest into crypto.
06:36So leverage meaning that, you know, you have $10, but the crypto trading platform may allow you to invest up to, say, $50 or $100 and so on.
06:46So in this kind of situation, if you're over leveraged, small market movements may make you lose all your capital.
06:52So I think this is also one of the mistakes that newer investors do.
06:57And I think the last one is, of course, the lack of diversification.
07:02So again, investing is usually traditionally you look at multiple asset classes, whereas sometimes people go all in on just one asset class.
07:11And I think that can be quite dangerous because what happens if there's a correction in that specific asset?
07:16You don't have other assets to help you manage the other difficult times.
07:21All right. This is definitely not easy to manage as first you mentioned that sometimes you have to balance between selling it early and from other than over leveraging it.
07:30But let's make this practical for the everyday retail investors watching at home.
07:33What should they realistically be doing right now?
07:36Should they be staying invested, reducing exposure, risk or sitting on the sidelines?
07:43And just as important, what is one thing investors should avoid doing during a downturn?
07:48A couple of guidelines that these are general best practices for investors, right?
07:55It's not specific to crypto, it's not specific to stocks, but I think people always need to assess their risk exposure.
08:01So when assessing their risk exposure is basically to understand, okay, do I have maybe 1% of my portfolio, 5% of my portfolio, 10% of my portfolio in a specific asset?
08:11In this instance, of course, it's crypto.
08:13So I think the general rule of thumb that I personally like is if you're comfortable, you should not be getting anxiety, you should not be getting sleepless nights over the amount that you've invested in an asset class.
08:24So whether that amount is 1%, 5%, 10% of your portfolio, again, every person has different risk exposure.
08:31People should be constantly understanding that, you know, am I taking too much risk for my own portfolio?
08:36Now, in terms of if people are believing that, okay, this asset class is suitable for me, I want to continue to invest in it, cost averaging over longer periods of time,
08:48that has traditionally in the past that has actually done very well, especially for an asset like Bitcoin.
08:53So instead of trying to time the market, okay, I buy, I try to time it when it's, I try to buy when it's low and try to sell when it's high, which most people try to do, you could instead invest at very, very fixed intervals.
09:07So perhaps every month I invest my RM50 or RM100 and so on.
09:10That's quite an interesting strategy.
09:13And I think most importantly, it's also something that you mentioned, Nina, if people are feeling uncomfortable,
09:17there's actually no harm or no shame to stay on the sidelines, to actually have that dry powder.
09:24So perhaps when you are feeling better with the macroeconomic situations or you feel better about the market cycles,
09:30then you would be able to have the capability to invest back at that moment of time.
09:36Getting comfortable and reducing our anxiety, but there's a lot of noise online also we need to consider, especially on social media.
09:44If we strip all that away, what key data points or indicators should investors actually be watching during any type of cycle, especially downturn?
09:54Yeah, a couple of things that we watch very closely.
09:56So the first thing would be definitely global liquidity.
10:00So looking at how much the central banks around the world are interested.
10:06So basically, when interest rates go down, when central banks want to stimulate growth,
10:12then these are conducive environments, conducive environments for assets such as tech stocks, digital assets and so on to be doing well.
10:21So that's something that we watch quite closely.
10:23I think something quite interesting to also watch is in terms of the correlations between Bitcoin, digital assets with other kinds of asset classes.
10:33So, for example, in the past, people have looked and seen that traditionally digital assets have had a little bit more correlation with the tech stocks
10:46and then not as much correlation with precious metals that go.
10:52So that could be quite an indicator for people in their portfolios if precious metals are doing really well.
10:59Then historically in the past, that may mean that it's not very correlated and digital assets may not be doing well for that moment.
11:07Some other aspects that we tend to look at, these are what we call on-chain metrics.
11:13So because the blockchain, the digital asset world, information is available to everyone online,
11:19so people can actually look at the activity within the Bitcoin network itself.
11:25So, for example, people could look at how many addresses, how many Bitcoin addresses around the world are actually being active right now.
11:33So, you know, that could give you a proxy into how active that people using Bitcoin are.
11:38And then you could also look at things such as the amount of mining capacity in the world.
11:43So, mining capacity is basically also a proxy to indicate how much activity there are in the Bitcoin network.
11:50So, again, if there's a lot of mining activity around the world, then that would possibly indicate in the short term, in the future,
11:58that there's a lot of belief, there's a lot of investment in the crypto industry.
12:02All right, I want to say thank you very much for helping us understand how can investors or crypto players navigate,
12:12especially during the downturn of crypto cycle.
12:14And again, I want to say thank you very much.
12:16And that was Aaron Tang, General Manager, APAC Eluno, for helping us make sense of crypto's latest downturn cycle.
12:23Please stay tuned with us as we will bring more updates on Niaga Awani.
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