Is Bitcoin about to drop even further? According to analysts at Bloomberg, the answer is a solid “yes.”
Bitcoin’s Not Doing So Hot
Bitcoin has been falling hard over the past few days. Previously, everybody’s favorite cryptocurrency had been trading for around $6,500, though a sudden drop to $6,200 had everyone wondering what would happen next.
We soon got our answer. Bitcoin suddenly fell to $5,500 in anticipation of the bitcoin cash hard fork that took place on Thursday, November 15, 2018. While Bitcoin Cash had undergone hard forks before, this one seemed to spark newfound interest – and even rage – amongst some of the biggest names in the crypto industry.
The Battle Begins
Roger Ver, for example, engaged in a nasty online war with Australian Craig Wright. Ver, often known as a “bitcoin evangelist,” has switched some of his enthusiasm over from Bitcoin to Bitcoin Cash in recent months, claiming the latter was true to Satoshi Nakamoto’s original vision for cryptocurrency. He was eager to see Bitcoin Cash remain as it was and stood against the hard fork, while Wright was eager to see something different.
Bitcoin has been trapped in a downward slump ever since, but right as the drama felt like it couldn’t become anymore extravagant, several analysts are claiming it’s just getting started. Bloomberg Intelligence says that Bitcoin could potentially fall another 70 percent and will likely be trading at roughly $1,500 before any further bullish momentum is formed.
Analysts Aren’t Feeling Too Pleased
Mike McGlone – the Bloomberg analyst making the claim – states that the Bitcoin Cash fork is what started the ball rolling downhill in the first place. He says:
That pump that began a few weeks ago got the market a bit too offsides with speculative longs for the good old days, but this is an enduring bear market.
Other analysts are sharing this sentiment. Travis Kling – founder of the hedge fund Ikigai – explained on Thursday following the Bitcoin Cash fork:
I didn’t sleep well last night. There’s a small chance that – it’s difficult to estimate – something really bad could happen related to bitcoin cash that could then impact the entire crypto market.
What Will Happen Next?
Following the massive price drop, cryptocurrency businesses such as chipmaker Nvidia Corp. reported extremely low sales forecasts for the current and first quarter of 2019. Executives claim they’ve witnessed lingering demand for mining equipment, and at present, the company is overstocked.
President and co-chief investment officer of Creative Planning Peter Mallouk explains:
The drop in the stock price of Nvidia is reflective of a future where cryptocurrency-fueled 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.
Is there a chance that bitcoin can recover before the end of 2018? Post your thoughts below.
Image courtesy of ShutterStock and Bloomberg