Bitcoin

Bloomberg Says the Bears Are Dug In – “Bitcoin’s No Longer Boring”, But Price Could Hit $1.5k

Bloomberg Says the Bears Are Dug In – “Bitcoin’s No Longer Boring”, But Price Could Hit $1.5k

Bloomberg’s crypto analysts predict that whilst the markets have tanked over the last few days, bitcoin could have “further to fall”; a drop to $1.5k might not be off the table.

The run up to the Bitcoin Cash fork saw the markets gaining momentum once again as investors piled in, hoping to capitalise on the opportunity to get double their coins for nothing once the split happened. Subsequently, the markets fell off a cliff, with Bitcoin Cash down 44% on the last 7 days at the time of writing.

BCH’s tumble took other cryptos with it, with bitcoin shedding $800 in value over the last 7 days, leaving it at just above $5,600 at the time of writing. Ethereum similarly shed around 16% of its value, as did Ripple. In spite of this, Bloomberg’s crypto analysts are not optimistic and whilst they conceded that “Bitcoin was no longer boring”, they see a new market bottom of around $1.5k for the currency as a possibility.

Bitcoin Cash Ripple-Effect

“I didn’t sleep well last night,” said Travis King of hedge fund Ikigai, on the subject of the Bitcoin Cash fork.

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“There’s a small chance that, it’s difficult to estimate, that something really bad could happen related to Bitcoin Cash that could then impact the entire crypto market.”

Whilst forks seem like a great way to get free money, because of the propensity of cryptos to rise and fall in tandem, they can present a very real danger to stability in the markets. Highly political forks like the one we have just seen in the BCH community can send shockwaves through the community, quickly wiping significant value off other cryptos High volatility days have seemed to be a thing of the past over the last few months with bitcoin often jokingly referred to as “the new stablecoin”, however the negative price swing which materialised on November 14th – 15th was like a flashback to the crypto market of this time last year, when $500+ price swings were common.

Bloomberg intelligence analyst, Mike McGlone echoed King’s words by saying that last week’s crash “was sparked by the pump for the Bitcoin Cash hard fork.”

“[The] pump that began a few weeks ago, got the market a bit too offsides with speculative longs playing for the good-old days. But this is an enduring bear market.” McGlone explained.

GPU Sales Also in Decline

This crypto-winter as some are referring to it, is depressing more than just the prices of cryptos. Nvidia Corp, one of the leading GPU producers has reported a significant decrease in sales of units this quarter and forecast weak sales predictions for the next quarter, indicative of a decline in interest in crypto mining. Company stocks have fallen accordingly.

Peter Mallouk, president and co-chief investment officer of Creative Planning, a wealth management company, wrote on the subject:

“The drop in the stock price of Nvidia is reflective of a future where cryptocurrency fuelled demand has cratered. While this is, of course, bad news for Nvidia, it is really the canary in the coal mine for Bitcoin and other cryptocurrencies.”

Nothing is Certain

Whilst the drop may be concerning for now, if anything has been proved over the years, it’s that no one can predict the crypto markets; they often rise and fall in ways that seem the absolute converse to how one might expect the markets to behave. However, the drop in GPU sales may be more indicative of sentiment in the crypto markets and one we should pay attention to. On the other hand, technological development is constantly moving forward, and so speaking of the crypto market as a static measure is inaccurate. The take-home as always is, don’t bet your house on it, but at the same time, no need to panic just yet.

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