Since mid-December, when a unit of bitcoin cost about $16,000-$20,000, its price has halved. Even though BTC managed to recover from February 6 correction, when its price plunged below $6,000, crypto skeptics remain incredulous.
In particular, Mike McGlone, who is a commodity strategist at Bloomberg Intelligence, believes that bitcoin could reach the low of $900, losing as much as 90% of its value before that.
In accordance with Bloomberg report, referring to McGlone, bitcoin might keep declining without farther restoration In price, loosing around 90%. All this may happen in conditions of seesaw increasing coin supply.
McGlone used Amazon.com Inc., as well as the Nasdaq Composite Index’s dramatic soaring and decreases between 1997-2001, known as the dot-com bubble, to back up his point. The strategist believes that the king of all cryptos may go down to $900 – BTC price that nobody saw for about a year.
“I spend a lot of time reading about this, and the more research I do, the more bearish I get. It’s very similar to these Internet companies we saw in the late nineties,” said the strategist.
The expert also stressed that the price of bitcoin has been pushed by the fact that its supply is limited. Indeed, developers of the first crypto-coin – bitcoin – planned that the supply should not be more abundant than 21 million of BTC units. However, recent multiple executed forks have led to a state whereby over 50 million of prominent coins have filled out the market.
But the thing is that all of them have come out of the genuine blockchain, so original bitcoin is not as unique as it used to be some years ago. By the way, the scope of well-functioning cyber-coins skyrocketed by 120% within the last year.
“Parabolically increasing supply is the primary limitation to cryptocurrency market-price appreciation,” explained McGlone.
Hence, according to his words, the growing supply may strongly affect bitcoin, leading to its fall to $900.