More and more analysts predict that 2018 is not going to be bitcoin’s best year at all. As a group of Swiss researchers has already claimed, before the start of 2019, the total market cap of the “king of all cryptos” will plummet by 35%, reaching the bottom of $77 billion.
Now, Capital Economics analysts called BTC “worthless” and predicted it would be operating even worse than traditional assets just like stocks in the foreseeable future.
Bitcoin To Lose Its “Crown”?
On April 5, experts from the research firm Capital Economics, headquartered in London, predict weak performance for bitcoin within a few upcoming months. The reason for such dragging is, according to analysts, the fact that BTC has no key worth.
Precisely, the firm elucidated that BTC has been pretty hard paralleled with S&P 500, the US stock market index. That started happening from the time when BTC’s prices started going down since mid-December 2017 after it reached its all-time high of $20,000.
However, as CNBC reports, the correlation has been conterminous and connected to a range of agents. In case of BTC, the later decrease in price has been caused by a myriad of agents. Among them, e.g., there are:
- the increasing anxiety related to the issue of regulation
- the prohibition of crypto-ads on giant media platforms, including Google, Facebook, and Twitter
- the process of barring clients from purchasing cyber-coins via credit cards, launched by several major American and British financial institutions
Stocks Not On The Wave Either
Despite anything, it does not mean that traditional assets, e.g., will perform better. These assets are mainly influenced by the trading misunderstandings between the US and China. And, according to experts, the value of stocks is going to see a decline in the upcoming months.
Nevertheless, the performance of bitcoin will be even worse than that of the above-mentioned. It is also noteworthy that there are entirely different factors that influence the adverse changes in prices of cryptos and stocks.
In particular, investors will be less interested in equity markets because of the growing US interest rates, which will be pulled back the economic growth. But when it comes to cryptos, they will be drawn down by a different factor, which is “simply not a credible long-run alternative to conventional currencies,” as per analysts.
Also, the Capital Economics’ experts explained:
"Bitcoin's correlation with equity prices has strengthened recently, but we think that this will be just temporary. We still think that bitcoin is essentially worthless, meaning that it is likely to fare much worse than other assets in the coming months."
Previously, lots of other experts assumed that bitcoin is ahead of all other assets, which are likely to jeopardize its users.
As of writing, BTC is being traded at around $6,600 per unit. It has hardly recovered from the mid-December 2017 drop, fluctuating between $6,000 and $15,000 since the start of 2018, according to niche website Coinmarketcap.com.