There’s been a lot of talk recently about whether cryptocurrencies are in a bubble or not. While hardcore crypto proponents have argued this isn’t necessarily the case, the rise of super speculative assets, like non-fungible tokens (NFTs) and meme coins, seem to suggest otherwise. Additionally, recent surveys from fund managers suggest that most seem to think crypto is in a bubble as well. One analyst has gone on to say that he think Bitcoin prices could plummet down to as low as $20,000 sometime soon.
If you’re trading Bitcoin or thinking about buying some right now, you might want to hold your horses. Guggenheim analyst Scott Minerd said in a CNBC interview that he thought Bitcoin prices could fall by at least 50% in the short term. Although he still remains bullish on Bitcoin, he suspects that the markets have gotten a bit too optimistic recently.
“I think we could pull back to $20,000 to $30,000 on bitcoin, which would be a 50% decline, but the interesting thing about bitcoin is we’ve seen these kinds of declines before,” said Minerd. However, he added that he feels this is just “the normal evolution in what is a longer-term bull market,” one that he’s incredibly optimistic about.
For those who haven’t heard of Scott Minerd before, besides being an analyst, as well as the Chief Investment Officer of Guggenheim, he was also one of the biggest Bitcoin bulls out there on the market. Going into 2021, Minerd made the prediction that he expected Bitcoin to reach $400,000 one day due to its limited supply. However, he also added that many investors made similar bullish predictions in 2017, which ended up falling by the wayside.
Considering that past experience, Minerd thinks that investors could see a repeat of 2018 this year, where Bitcoin prices collapse as this bull market cools down for a bit. While he doesn’t say exactly how long it will take before prices correct themselves under this scenario, it likely won’t take anywhere near as long as the two years between 2018-2020.
This wasn’t the only piece of Bitcoin-related news to emerge. Analysts over at JP Morgan have chimed in on the situation as well. According to their research, they’ve warned that if Bitcoin doesn’t hit $60,000 again anytime soon, prices are going to fall into a steep, downward spiral as momentum decays. According to their estimates, we could see Bitcoin prices falling for several months under such a circumstance.
However, it’s also possible that Bitcoin will only tumble for a short period of time before returning once more to even higher highs. That’s what’s happened so far when Bitcoin hit $30,000 and $50,000 earlier this year.
Bitcoin is currently trading around $53,500 right now. While prices were hovering above $62,000 for a while, Turkey’s sudden banning of all cryptocurrencies ended up sending Bitcoin into a bit of a freefall. Since then, prices haven’t made a comeback, with crypto traders wondering when this bull market is going to continue once more. Other cryptocurrencies have been pulled up thanks to Bitcoin’s rise as well. If prices do end up falling, expect the rest of the crypto market to see a big correction as well.
