The price of Bitcoin (BTC) plummeted to $74,000, reigniting concerns about a “crypto winter” in the market.
Industry leaders say the decline is not limited to cryptocurrencies, but is part of global macroeconomic changes.
Bloomberg's Mike McGlone paints a rather pessimistic picture, comparing the current situation to the 2008 financial crisis. He argues that assets such as Bitcoin, silver and copper are overvalued and the market is in a “cleansing” phase. McGlone predicts that Bitcoin could fall to $50,000 and silver could return to $50. The analyst said risk assets will remain at risk as long as stock market volatility remains low. Experts say this is the year to “stay in government bonds.”
Dave Weisberger characterizes Bitcoin's recent decline as a “time-based capitulation,” while maintaining confidence in the digital asset's fundamentals. Weisberger points out that Bitcoin's 24/7, open and transparent market is much healthier than physical commodities such as silver. He interprets the 40% decline in silver as an “altcoin-like move.”
The real big change, Weisberger said, is in the Fed's regulatory powers. He believes that Bitcoin's acceptance as “clean collateral” will make it central to the financial system in the long term.
James Ravish approaches the subject from a broader macro perspective, drawing attention to the theory of “tomorrow's prices.” He argues that while artificial intelligence increases productivity, it also causes natural deflation, but debt-ridden economies need inflation to grow. Lavish believes the U.S. will not be able to roll over its $14 trillion of maturing debt at low interest rates, and that markets are pricing in this uncertainty. He also said that Bitcoin is still considered a “leading edge of risk” and foresees a liquidity squeeze in global markets.
*This is not investment advice.
