According to CoinMarketCap, the aggregate market capitalization of cryptocurrencies is US$1.96 trillion (A$2.7t) at the time of writing, down $1 trillion (A$1.4t) from its November peak. Bitcoin’s price plummeted last week as a result of an internet cutoff in Kazakhstan, which is the world’s second biggest center for bitcoin mining, after the United States.
The internet was cutoff because the country’s president, Kassym-Jomart Tokayev, directed the country’s telecom provider to halt operations on Wednesday after huge anti-government rallies. Then bitcoin received a double blow. The US Federal Reserve issued the minutes (hawkish) from its December meeting, sending the cryptocurrency world into a tailspin.
According to the minutes, America’s central bank is contemplating hiking interest rates sooner than expected and selling off a portion of its assets. This triggered a massive bitcoin sell-off, which resulted in the price plummeting. Other cryptocurrencies, including as Ethereum, have also plummeted in value during the last week. Ethereum’s value fell from over US$3,800 on Wednesday to less than US$3,200 on Friday.
It was considerably lower at the time of writing, at US$3,147. But Mike Novogratz, a bitcoin millionaire and veteran Goldman Sachs employee, believes the currency has already hit the nadir and that it will only go better from here. Bitcoin has had a sluggish start to the year, with the currency plunging by a stunning 12% in the initial few days of 2022.
BTC began the year with a value of about US$47,000 (A$65,000) and is currently worth US$41,721 (A$57,000) only 10 days later. Over the last two months, the global crypto market value has fallen by $1 trillion. Other cryptocurrencies, including as Ethereum, have also plummeted in value during the last week. Ethereum’s value fell from over US$3,800 on Wednesday to less than US$3,200 on Friday. It was considerably lower at the time of writing, at US$3,147.
But Mike Novogratz, a bitcoin millionaire and former Goldman Sachs employee, believes the currency has already bottomed out and that it will only go better from here. “On the charts, $38,000 to $40,000 seems like the bottom.” He said that bitcoin’s low price points will actually increase its worth since they are “attractive levels to acquire.”
Other experts, though, were skeptical. Katie Stockton, head of the US investment company Fairlead Strategies, believes that if bitcoin falls below US$44,200, it may go either way – a massive price increase or a rapid crash. Stockton stated that US$44,200 might be a “support level” for the cryptocurrency, implying that demand may increase since the lower price is appealing to buyers but not being so high that sellers would dump their tokens. If bitcoin falls below that level, “essential long-term support around the bottom limit of the weekly cluster will very certainly be challenged, at $37,000,” she told Bloomberg.
Last month, well-known investor Louis Navellier issued a warning, stating that a dip below US$46,000 didn’t seem to work well and could likely lead to a drop of just US$28,000. “I would consider a decline below $US46,000 (the 200-day moving average) to be a yellow flag, and a downturn below the spring low of $US28,500 to be a completed massive double top,” he said, “which points to a decline to below $US10,000, which would coincidentally match many of the multiple 80+ percent declines in its storied history.”
Greg Rubin, chief of trading at Australian business Global Prime, projected bitcoin will surpass $US10,000 next year in an interview with news.com.au in December. The investment guru believes bitcoin has one further bull run remaining in it before it remains at a low price for an extended period of time. He predicts that the top-ranked coin will trade for between $US114,000 ($A158,000) and $US130,000 ($A181,000) in 1Q23. However, prices would then plummet rapidly, where they would remain until the next boom. “Looking at the scale of possibilities, it seems that the bull run that began in 2020 will most certainly conclude next year,” he told news.com.au.
Bitcoin’s price would fall to $US10,000-$US20,000 ($A13,000-$A27,000), a 70% decline, and would stay there for some time. “When the volatility subsides, it [bitcoin] will wander for years on little volume,” he stated.