The price of bitcoin and other cryptocurrencies will suffer a 90 percent correction that will cause a “mass market wipeout” within the next 12 months, says investment bank GP Bullhound.
While the market correction will decimate many virtual currencies, the few survivors are in for an unprecedented rally, GP Bullhound predicts, as reported by CNBC.
“Once this ‘crypto-winter’ passes, the growth dynamics for the precious few survivors will be unprecedented,” Sebastian Markowsky wrote in his report, “Token Frenzy: The Fuel of the Blockchain.” Markowsky is a director at GP Bullhound and lead author of the report.
In his report, Markowsky also predicts that institutional investors will start moving into the cryptocurrency market while more retail investors will also plunge in.
As CCN.com previously reported, the Rockefeller family is so confident about the future of crypto that it’s making long-term investments in blockchain and cryptocurrency startups.
The migration of institutional and retail investors into the crypto market will cause price inflation, which will lead to eventual “panic” selling and a dramatic price plunge, GP Bullhound predicts.
Of course, this is just one bank’s bearish prediction for the mushrooming virtual currency market, which is gaining more mainstream traction with each passing day.
There are currently more than 1,000 cryptocurrencies, but many market observers say most will not survive. The market leaders are bitcoin, followed by Ethereum, and Ripple.
Even cryptocurrency skeptics believe these three digital currencies will survive a bear market, at least in the short term.
Despite his bearish outlook on the industry, Markowksy predicts that initial coin offerings (ICO) will continue to flourish. In 2017, ICOs raised more than $4 billion. That’s a significant amount of capital for a nascent market.
But Markowksy warned that the recent proliferation of ICO scams ensures that investors will no longer pour money into them without some concrete evidence that the investments can be viable.
“Raising money on the back of a whitepaper will not be possible,” Markowsky told CNBC. “I think people will need to see more product. The bar will be rising very fast.”
Despite GP Bullhound’s sobering projections, bitcoin evangelists like Twitter billionaire Jack Dorsey and tech billionaire Tim Draper remain unmoved in their confidence that cryptocurrencies are here to stay.
To prove his point, Draper has set a whopping $250,000 bitcoin price target for 2022, as CCN.com has reported. “I’m thinking $250,000 a bitcoin by 2022,” Draper said. “It’s happening and it’s going to be awesome!”
Given his past success at predicting bitcoin price movements, Tim Draper’s flamboyant predictions aren’t to be taken lightly.
Featured image from Shutterstock.
Last modified: May 20, 2020 8:50 PM UTC