Bitcoin is becoming increasingly popular and drawing investors by the number because of the significant returns in bitcoin investments over the past six years. Bitcoin is emerging as a strong contender in several aspects of finance such as investments, retirement portfolios, assets, and so on.
But as of this year, a Wall Street veteran has predicted that the cryptocurrency market is in line to face a phenomenal crash in the near future. The outcome of the crash, whether the market will come to a halt or continue at a slow and steady pace remains to be seen.
Peter Boockvar, the Wall Street veteran who made this foreboding prediction states that the value of bitcoin is likely to fall by 90% from the current levels. He calls it a classic bubble, where anything that grows as rapidly as bitcoin did is bound to fall back to where it started. He said that there were chances that by next year, bitcoin value could fall to $1,000 to $3,000. It seems hard to comprehend, especially since bitcoin traded at above $11,000 just a couple of days back. Boockvar attributes the onset of the crash to a number of factors. He states that the rising interest rates across the globe are a major contributor to the fall of the bitcoin. He also blames the money policies designed by central banks to ease the impact of the global financial crisis.
Boockvar even questions the existence of cryptocurrencies if it was not for the concept of quantitative easing.
It is surprising to even imagine a powerful financial tool such as bitcoin plummeting downwards. But it seems as though Boockvar is not the only one making these dire predictions. Over the past few months, a number of experts have given out warnings of an imminent crash to investors who are riding on the latest surge in bitcoin pricing. Experts predict that despite the surge, there is no viability for the cryptocurrency in the long run.
Boockvar predicts that once the bitcoin market falls, investors will start to look at risk assets differently and that there could be significant collateral damage in the stock market. He states that the impending collateral damage would depend on the psychology of the investors and not on the economy itself.
Talks about a crash in bitcoin value started in November 2017 after the value of bitcoin went up by $1000 in a mere 24 hours.