Bitcoin has been known as a double-edged sword, and not only in terms of its use and popularity but also regarding price wavering. The father of all cryptocurrencies may seem a risky investment, and this can be proved by words of the Pantera Capital founder and CEO Dan Morehead.
A few days ago, on December 19 CNBC published his prediction concerning bitcoin’s potential huge drop by 50% within the following week. And it seems that Morehead has a point. Bitcoin started dropping down after it entered the trading market on December 17. Then it cost $19,670 but just in around five days it decreased to $12,973, according to the CoinMarketCap. In the space of the last 24 hours (December 22) it has lost 23% of its value.
The “drop” before the storm?
Morehead, one of the earliest investors who bought bitcoin at $72, believes that in a long-term perspective bitcoin will be able to shoot a price that we have not seen by now. However, before this happens, the digital coin will go down to a margin that we saw just last month.
"For the big blockchains like bitcoin, ethereum, and ripple, we're in the first innings of a multidecade thing. And there's going to be some ups, and there's going to be some downs, but we're still really early," said Morehead, who is also a former hedge fund strategist and a current digital currency investor.
The investor predicts that bitcoin will break down by 50% within the following week.
It might go "down 50 percent next week... where it was a month ago," said Morehead. But in a year, "it'll be much higher than it is today."
Meanwhile, Morehead prefers to characterize bitcoin and its brethren as “digital gold”. Notably, he started his career at Goldman Sachs on a position of a mortgage-backed security trader. He has also had experience of working for Tiger Management as a head of macro trading and CFO.
“Lost” in mining
In Morehead’s opinion, mining business nowadays is much more complex than before and is full of serious competitors. However, it has been growing successfully. "There was a period where it was doubling every six weeks. So it's like Moore's Law on crack," said he.
Currently, due to the technical intricacy of blockchain technology, the fees for bitcoin transactions are also growing. So if the new “off-block” solutions are not found, cryptocurrency transaction fees may keep skyrocketing. Anyway, the primary concern right now remains bitcoin’s rate, which has all the chances to wonder world’s community with either new drops or surging.