Bitcoin has lost a lot of ground, but several analysts believe the cryptocurrency will recover.
Baron Rothschild, the 18th-century British nobleman and member of the Rothschild banking family, was quoted as saying “buy when there’s blood in the streets, even in the blood is your own.”
The quote has popped up on Twitter following Bitcoin’s most recent price dive.
“Bitcoin at 30k is just sweating, bloodshed is when it goes to 15k,” one person responded.
Bitcoin’s latest battering came amid the escalating crisis between Russia and Ukraine and follows another severe drop in January.
Bitcoin fell to $35,005.30 after Russia launched an attack in Ukraine overnight as of time of writing. This is its lowest level since July 20, when prices fell to $29,971.90. The cryptocurrency is a long way down from its November high of $69,077.44, according to CoinGecko.
‘We’re Getting Close to the Bottom’
Despite the recent spate of bad news, several industry analysts discount the idea of bitcoin crashing.
“It’s fascinating to see how these Russians Ukraine tensions have been really weighing on crypto,” said Edward Moya, senior market analyst for the Americas with Oanda. “Often times when we cover crypto you take a look at look correlations and right now you can pretty much throw everything out of the window.”
Moya said that cryptocurrency has been hurt in the last two months by the Federal Reserve’s tightening policy and geopolitical risks, but he believes that “you’re going to start to see that a lot of that has been priced in now.”
“I think that we’re getting close to the bottom,” he said. “I think that there is still a tremendous amount of money and interest and the long-term investment potential is still there.”
Dr. Merav Ozair, a blockchain expert and fintech professor at Rutgers Business School, said “there is no way bitcoin is going to zero.”
“Whatever is happening in the crypto market has nothing to do with what’s happening in the network,” she said. “I have been researching the network itself and there’s a kind of disconnect happening here.”
Ozair added “Russia is having a love-hate with crypto, but I’m not sure that this is really the problem.”
‘The Story Isn’t Volatility’
“It could be that people are just focusing on something else,” she said. “Sometimes you take assets out just because you are unsure of what’s going to happen and that could be driving the prices down.”
The first reaction is panic, Ozair said, “but then “rationale sets in and we understand that we’re still OK and then the market stabilizes.”
Rodrigo Vicuna, chief financial officer at Prime Trust, said that he does not believe bitcoin prices will collapse, noting that “the current movement reflects the ebb and flow of stocks and represents several things going on in the market right now.”
“Historically, Bitcoin tends to fall in the January-February timeframe, so this isn’t out of the ordinary,” he said. “There are numerous market forces that are leading to this short-term volatility; however, we see a whole host of entrants coming into the market from retailer investors to institutions and miners.
From a retail perspective, Vicuna said, “the story isn’t volatility, it is adoption, and we continue to see that increasing.”
“Bitcoin is digital gold, and as scarcity goes up, we’ll see institutions expand their positions,” he said.
‘Cryptocurrencies are a Mess’
Vicuna said he sees bitcoin hitting $100,000 over the next 18 months and he believes “that regulatory clarity can help drive greater stability and support within the industry – positioning bitcoin into a lower risk asset class with clear paths toward consumer adoption.”
Louis Navellier, founder of money manager Navellier & Associates, is less than enthusiastic about bitcoin’s future, saying it will “crash to $10,000 in the next couple years.”
“Bitcoin is banned in China, India and Turkey,” he said. “All that is needed is for another major country or two to ban Bitcoin and other cryptocurrencies.”
The “amusing thing”, Navellier added is that Securities and Exchange Commission Chairman Gary Gensler taught about cryptocurrencies and blockchain at the Massachusetts Institute of Technology.
“The Treasury says that cryptocurrencies are ‘an asset’ to be taxed, but the Fed says that cryptocurrencies are ‘not legal tender’ and the SEC Chairman say that cryptocurrencies may be worthless in the upcoming years,” he said.
Overall, Navellier said, “cryptocurrencies are a mess.”
“The only thing that could possibly save them would be if they paid interest and competed with bank deposits,” he said.
