Opinion: Bitcoin will find the "bottom" at 85% below the historical high
Anthony Pompiano, founder and managing partner of Morgan Creek venture capital firm, believes that the first cryptocurrency can reach a “bottom” of 85% below the historical maximum. He said this on Monday in the Squawk Box program on CNBC.
“Everything will end up somewhere 85% below the historical maximum, that is, somewhere around $ 3,000. We approached this at the weekend, but we will probably have to descend a little more, ”said Pompiano, adding that he bases his forecast on his own experience in the cryptocurrency space.
During the transfer, the presenter noted that many investors lost confidence, suggesting that the likelihood of their return to Bitcoin after the losses incurred this year may turn out to be low. In response, Pompiano said that Bitcoin was overvalued when he reached the historical maximum, and that a healthy correction is now being observed.
“Bitcoin was overvalued in December 2017. This year, there were more sellers than buyers, so the price drops. But there are three things to keep in mind. First, Bitcoin is a transaction platform. It is the safest platform in the world, and it must have some value. It can not cost nothing. Secondly, it is the most profitable asset class in the last 10 years. During the longest bull rally, he walked around the S & P, Dow Jones and Nasdaq, etc. During this time, it has fallen twice by 80%, but over the past two years, it has grown by 400%. Third, all this was achieved by retail investors, ”said Pmpliano.
Answering the question of one of the participants of the discussion on whether Bitcoin can repeat the scenario of tulipmania, the head of Morgan Creek noted that if in 2017 buyers were mostly retail, now financial institutions are starting to connect.
“This is not often said, but most of them do not buy on the stock exchanges. They buy in the OTC market, which is not transparent. Thus, we are now witnessing the erosion of retail investors, ” added Pmpliano.
He also assured that Morgan Creek is not going to refuse to invest in Bitcoin, but on the contrary, will buy during the price cuts, since “it has a very deep faith in Bitcoin”.
Earlier, Anthony Pompiano said that many cryptocurrency hedge funds will soon be forced to announce closure, while ICO projects will have penalties and bankruptcy ahead. According to him, this is a natural process of cleansing the industry from "tourists".
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