We review some of the heart-stopping news events that happened this week, as well as the silver linings that lay ahead.
The parade of gloom-and-doom news for cryptocurrencies continued on Thursday, including the spectacular number that they shed $60 billion in value over a 24-hour period this week.
As the space digested that staggering amount of loss, also came predictions that it could be worth a mere $6,000 or so by the end of the month.
There were some kind words about Bitcoin, however. They came from Peter Thiel who said the crypto remained a favorite for him.
Let’s go over the space that has had a heck of a negative week.
There were a number of issues that led to Bitcoin’s slide. On Wednesday, we told you about Google announcing it would banish crypto-related ads as of June.
Before rebounding Thursday, Bitcoin’s price fell as low as $7,676.52. At the time of writing, however, it had made up those losses and was at 8249.65.
Fundstrat’s Tom Lee, one of the most respected analysts on Wall Street, who has also gained the reputation of being a Bitcoin bull, released a report about the space on Thursday.
In it, Lee, and colleague Robert Sluymer stated that they saw Bitcoin’s price falling to as low as $5,873 before rebounding to earlier predicted targets of $25,000 by the end of the year.
The pair went on to state that when investor sentiment is this weak, the market is increasingly ’fire, ready, aim’. This basically means that any negative news could trigger a sell-off because people are on edge.
In February, Lee said that the sentiment was signaling that crypto investors are still bullish and there is an upside for the digital asset.
We told you about a complicated analysis the firm used to project Bitcoin’s processes. This analysis entailed evaluating 22 corrections of 20% or more that the crypto has seen since 2010. Based on these findings, Lee determined that in “bull” periods, Bitcoin takes about 1.7 times the duration of its decline to recover.
That time frame implies that it will take 85 days for Bitcoin to fully bounce back from its latest plunge, which lasted for 50 days — meaning it should rise to fresh records by midyear. And that’s where the $25,000 comes into play.
Fundstrat players also addressed how Bitcoin’s price fall of roughly 60% since December affects miners. The report noted that Bitcoin is currently trading at the breakeven cost of mining. Still, this is far from the $3,000 price that would cause miners to pain.
It was noted by Fundstrat that in January 2015, Bitcoin’s price was around $200. At that time, that price was considered to be “breakeven” as far as mining costs.
There is one investor who spoke out highly about Bitcoin this week . Facebook board member Peter Thiel said at a public event Thursday that Bitcoin could become even more valuable than Ethereum, which is considered to have more use cases than Bitcoin.
At that public event, Thiel referred to Bitcoin as being a digital version of gold and argued that the quest to amass money “is the bubble that never pops.” At the event, he said:
“I would be long Bitcoin, and neutral to skeptical of just about everything else at this point with a few possible exceptions.”
And as far as that silver lining is concerned, observers say that March has traditionally been the worst trading month for Bitcoin.
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