The bitcoin value may surge as excessive as $300,000 within the newest bull-market rally, however may then plunge 90% right into a “winter” lasting years, the founding father of cryptocurrency trade BTCC has warned.
Bobby Lee told CNBC’s “Squawk Box Asia” on Monday that 2021 is a bull marketplace for bitcoin, of the type that comes round each three or 4 years. Lee, who at present runs crypto pockets app Ballet, stated 2013 and 2017 had been additionally bull-market years during which the bitcoin value elevated by 10 or 20 occasions.
He predicted the bitcoin price (BTC) would hit $100,000 by the summer time and “doubtlessly” $300,000 by the tip of the 12 months, “if historical past performs itself out once more.”
Nevertheless, Lee stated “bull market cycles come and go.” He added: “After a bull market peak, inevitably it may go down by fairly a bit, and that is when the bubble bursts.”
Lee warned bitcoin may then enter a “winter” the place the value stays low for 2 to 3 years. “So after it peaks out, whether or not it is $200,000, $100,000 or $300,000, individuals must be conscious that it may fall as a lot as 80% to 90% of its worth from the all-time peak.”
Lee co-founded BTCC in 2011, making it one of many oldest cryptocurrency exchanges.
The bitcoin value has roughly doubled this 12 months already to round $58,100 on Monday, down from a excessive of near $62,000 every week in the past. And it’s up by nearly 800% from March final 12 months, when it tumbled as coronavirus began to batter the worldwide economic system.
Advocates say the world’s greatest cryptocurrency by market worth will proceed its exceptional run, as rising numbers of institutional investors become involved. In addition they argue bitcoin can act as a hedge in opposition to inflation, which many traders anticipate to rise.
However critics say bitcoin’s massive volatility means its institutional adoption will likely be restricted. Many argue it’s in a bubble pushed by enormous quantities of stimulus and is about for a value crash of the type seen after 2017, when bitcoin plunged from round $20,000 to under $4,000 in simply over a 12 months.
“I do not know if historical past will repeat itself, however what we do know is that bitcoin bull-market cycles come each 4 years and this can be a large one,” Lee stated.