The mass marketing of bitcoin may lead to the crypto coin sliding below $30,000. Here’s more on how the crypto bubble is starting to burst.
Bitcoin peaked at around $68,000 in November 2021
Bitcoin, the world’s largest cryptocurrency is expected to see a decline of over 50 percent. While the crypto coin peaked at around $68,000 in November 2021, is beginning to deflate according to Invesco, an investment management firm. Paul Jackson, the firm’s global head of asset allocation stated that its mass marketing is similar to the stockbroker’s activity leading up to the 1929 crash. “We know how that ended and Bitcoin has already fallen to around $42,000 (as of 7 January 2022), following closely the downward path of our mania template. That template suggests a loss of 45 percent is experienced in the 12 months after the peak of a typical financial mania,” explained Jackson.
According to Jackson, if the same pattern follows, Bitcoin’s price can fall as low as $34,000 to $37,000 by October 2022. He also added that this is assuming that the coin’s price has already reached its peak. The coin started scaling from $9,000 in July 2020 to over $63,000 as of April 2021. After a plummeting below $30,000 last year, it reached the peak of $68,000 in November 2021. In the first week of the new year, Bitcoin reached $41,500.
More on how the crypto bubble is bursting
Jackson also added that this pattern is very similar to the crash of the American stock market in 1929. Explaining that it is a ‘financial aia’ where prices go up for about three years before the peak. Then follows with steep losses as prices are reducing for the following three years. “The (mania) template also suggests that bubbles typically deflate for a further two years. Hence, we think it is not too much of a stretch to imagine Bitcoin falling below $30,000 this year (with the health warning that we have got this wrong before and that it seems to be going through a series of bubbles),” said the global head.
Contrastingly, Goldman Sachs, the investment bank predicted a rise in the price of Bitcoin. Their report stated that its price can go over the $100,000 mark within the next five years.