During the past week, Bitcoin has fallen to lows around $4,000. Although the premier cryptocurrency is now rebounding, and the wider cryptocurrency market with it, it has seen a massive correction. Although the recent market crash seemingly came out of the blue, one person actually predicted the crash – more than two months ago.

Antonopoulos was able to predict the recent Bitcoin crash

Specifically, this prediction came from Andreas Antonopoulos, a well-known Bitcoin advocate. Despite being a crypto proponent, Antonopoulos was seeing the first warning signs as he spoke on the What Bitcoin Did podcast on January 3rd.

In the podcast, Antonopoulos said that a potential recession or large-scale market correction could be disastrous to crypto. This comes despite the fact that crypto is seen as a “counter-cyclical” asset and a store-of-value.

In fact, a store-of-value often appreciates during stock market crashes. Nevertheless, the past week proves that the stock market crash spread to Bitcoin and the crypto market.

“Crypto will crash hard”

This is something Antonopoulos foresaw, stating that “what most people don’t realize I think is that, in the beginning at least, crypto will crash hard”. Antonopoulos also said that this comes down to that the economy will “dry up”:

“And the reason it will crash hard is because a lot of the venture capital, corporate investments and private investment from individuals that is based on cheap money and disposable income and excess cash in portfolios etc., like in any other part of the economy, will dry up.”

Antonopoulos’ prediction now seems eerily accurate, as growing fears over the COVID-19 coronavirus grip financial markets. On Thursday, the stock market saw its worst day since 1987’s “Black Monday” stock market crash. Bitcoin has also undoubtedly taken a beating in the last few days.

This explains why the stock market crash spread to crypto

Although many analysts are trying to explain the concurrent stock market and crypto market crash with metrics, Antonopoulos was straightforward.

In the podcast segment from early January, Antonopoulos said that “when people get scared, when there is a recession like that, they pull back their investments, and they’re going to pull back from crypto too.”

According to the macro analyst Raoul Pal, Bitcoin’s crash relates to the VAR risk management metric. This made hedge funds liquidate their crypto holdings during the stock market crash, in an effort to reduce risk. Antonopoulos, on the other hand, simply argues that it is due to a lack of liquidity:

“I think the first order effect that happens if we have a recession is crypto crashes because all the liquidity dries up which is a classic effect and symptom of a recession.”