Bloomberg has predicted that Bitcoin could bottom out as low as $1,500 following the recent bloodbath in the cryptocurrency space.
The world’s most valuable digital currency nosedived to below $5,200 on Monday but was as high as $6,371 a few days before on Wednesday.
At the weekend Bloomberg’s Vildana Hajric and Olga Kharif wrote “Bitcoin’s no longer boring… some digital asset industry pundits have already begun referring to it as the crypto winter”.
They were referring to dramatic drops in the value of the leading cryptocurrencies, chipmaker Nvidia losing $23 billion in market value – reportedly as a result of crypto miners buying fewer graphics cards – and an ideological split within Bitcoin Cash, the currency which separated from Bitcoin last year.
Bitcoin Cash, the fourth-largest cryptocurrency, effectively forked into two different currencies on Thursday when two software development teams failed to agree on the most appropriate way to update its code.
“I didn’t sleep well last night,” Travis Kling, founder of the hedge fund Ikigai, told Bloomberg last week.
“There’s a small chance that, it’s difficult to estimate, that something really bad could happen related to Bitcoin Cash that could then impact the entire crypto market.”
Bitcoin has lost more than 60 per cent of its value so far this year. Hajric and Kharif cited Bloomberg Intelligence analysts who have predicted that Bitcoin’s price could fall to $1,500 – another drop of more than 70 per cent from where it is today.
Bloomberg Intelligence analyst Mike McGlone warned that we are in the middle of an “enduring bear market”.