The two most popular cryptocurrencies in the world are now seeing their price drop. The price of Bitcoin today (around $49,000) is much lower than in the early days of December, when it was 57,000. In early November, bitcoin was climbing to all-time highs and was worth $69,000. At the same time, Ethereum was also much cheaper – within weeks of the all-time high of $4,850, it fell to around $4,000.
CEO of investment management firm Richard Bernstein Advisors warns that cryptocurrencies are the biggest financial bubble in history. He advises investors to steer clear of “bubble assets” as, in his view, their quotes could crash and fall by as much as 90%.
Richard Bernstein, who has over 39 years of experience on Wall Street, calls the volatile cryptocurrency market a “monster” and sees its similarity to the 2000 dot-com bubble. more. In the tech bubble, people were surprised when stocks fell 30, 35, 40%. And they did not know that it was only halfway, because prices fell again by 75, 85 and 90% – he recalls.
Ryan Payne, founder and chairman of Payne Capital Management, offers very similar predictions. According to him, cryptocurrencies will cause an unprecedented stock market crash. He thinks assets such as Bitcoin and Ethereum are out of control. Payne – like Bernstein – alludes to the dot-com case of 20 years ago. “What’s happening in the cryptocurrency market right now is even crazier than the dot-com era,” Payne said.
Despite claiming that the cryptocurrency markets are in a bubble, Payne predicts that the price of bitcoin will rise in the near future due to excess liquidity in the markets. He likens cryptocurrencies to a casino, saying the abundance of money flowing into the industry is making it bigger and bigger.
Famous individual investors aren’t the only ones who doubt the power of cryptocurrencies. A study by Natixis Investment Managers shows that more than 50 percent. Institutional investors expect a correction in bitcoin and other “coins” markets next year. Nearly 500 institutional investors from 29 countries in North America, Latin America, Great Britain, continental Europe, Asia and the Middle East took part in the study.
Most of the institutions surveyed expect bitcoin and other digital assets to generate profits in 2022. Interestingly, according to a large part of the respondents, the correction will also affect interest rate sensitive bonds (45% ), stocks (41%) and technology companies (39%).
Minor sentiment on cryptocurrencies isn’t stopping institutional investors from saying they don’t want to reduce their ownership of digital assets. The survey shows that 28 percent. of respondents who invest in crypto, 90%. he says he will maintain (62%) or increase (28%) his allowance.
At the same time, however, the vast majority of respondents believe that cryptocurrencies need more regulation.- Nine out of ten respondents predict that central banks will need to regulate “coins”. Few people think cryptocurrencies can replace reserve currencies (25%) or traditional currencies (28%), according to the survey.
The well-known American financier – Michael Novogratz is also convinced of the difficult start of 2022 for cryptocurrencies. In his view, the bears will have the upper hand as traders typically sell high-value assets in late December and early January. For this reason, Novogratz also expects tech stocks to fall. He recalls that until recently bitcoin and tech companies had an amazing streak and now nothing is cheap.
The former hedge fund manager assumes that in the case of virtual currencies, investors will soon see a sideways trend or an accentuation of the declines on the charts. He adds that he is not worried about bitcoin and major altcoins in the long term.
Novogratz points out that the high valuation of cryptocurrencies is largely due to the large number of financial and monetary incentives provided by governments and central banks related to the Covid-19 pandemic. According to him, the price of bitcoin could drop to around $42,000 and this would be a key level of support for this “coin”. He adds that he would be surprised if the price fell below $40,000.