Is this true?
Well, Jeffrey Gundlach, the American businessperson who founded DoubleLine Capital LP, thinks so! His conclusion is based upon the fact that the global cryptocurrency marketplace is vacillating between bullish and bearish. In other words, there is more of a negative trend, than a positive trend, in the air. Therefore, Bitcoin being the most popular of digital currencies could confront a downswing touching $10,000, soon. Here you can read how Bitcoin trading can work.
Bitcoin’s Fortunes Since May 2022
The crypto crash began much earlier but revealed the most adverse of effects in May 2022. The total market cap had gone below 1 trillion in U.S. dollars. Mid-June 2022 witnessed the total value of tokens to be around the U.S. $896.97 billion.
Of course, the most drastic sufferer amongst these tokens/coins was Bitcoin (BTC). Currently, it displays a market cap of $397.28 billion. Its price stands at $20,859.20. Investors are shocked because it had been reveling in a wonderful price hike touching $68k! To see such a drastic drop, which has never occurred since the end of 2018, is unbelievable! The threshold drop is about 30 times. Even its trading volume is about $32.60 billion, only.
Why did Bitcoin experience such a disaster?
- One reason is the inflation rate in the U.S. It has gone up to 8.5%.
- It did not help that CEL (Celsius the Network) reduced by about 70%. Naturally, investors went into panic mode, selling off the coins as fast as possible!
- The Federal Government had gone in for a tightening of policies regarding cryptocurrencies. They enhanced the target for the federal funds rate. The rate stayed between 1.5% and 1.75%. The policy even concentrated on shrinking the balance sheet. The government also paused or slowed down the transactions for the overflow.
All these are contributing factors for Bitcoin to lower its price still further and reach the U.S. $10k level. Experts are even predicting that this scenario might carry over into 2023. It will hit investors and commercial establishments relying on Bitcoins for payments, hard!
Such predictions are causing apprehensions amongst crypto enthusiasts. Therefore, they are keen to sell off all their digital currencies, not only Bitcoins. They are not even worried about the losses they are bound to incur. After all, Bitcoin has been on a bearish trend since the end of 2021.
Opinions of Experienced Experts
As mentioned earlier, he did not predict a healthy future for Bitcoin. He put forth his views openly, during an interview on the CNBC channel. The renowned Bond King, as he is known across the globe, suggested that Bitcoin was being liquidated. It would be the primary cause of Bitcoin reaching a price of $10,000.
Of course, even traditional finance markets experience crashes. However, what the crypto marketplace has been witnessing in the last couple of months, is truly extraordinary. Right at the beginning of 2022, Gundlach had stated that the bubble surrounding BTC could burst soon. Its price swings were too significant to sustain for long. An instance is BTC’s price crashing by $12k within the span of 24 hours when it was at a high of $42,000.
At the same time, Gundlach also labeled BTC as a stimulus asset, when it showed an upward swing again! He declared that it was a better investment than even gold.
He is a well-known commentator on cryptocurrencies. He is also a veteran derivatives trader.
Brandt agreed with Gundlach’s views, regarding BTC’s future. However, he did not suggest a drop to $10,000, but to $13,000.
He is the former CEO of BitMEX.
He hopes that Bitcoin holds on to a base price of $20,000. If the pricing reduces, then investors will feel pressurized to sell their holdings. In turn, this would lead to a further lowering of the price of Bitcoin.
While long-term investors are facing sleepless nights, not so the dips investors. They feel that every decline works to their advantage.
To conclude, experienced investors believe that this is just the crypto winter, which will last for some time before the crypto spring arrives. They have witnessed bearish and bullish trends in the crypto marketplace before. They believe that Bitcoin may reach a price of $50k soon, and this will bring profits wending their way into their digital wallets.