The year 2017 was the best year for Bitcoin and cryptocurrency in general as BTC prices shot up to an all-time high of around $20,000 bringing the industry into the spotlight.
This year, however, the crypto market has not built on the gains of the previous year—bitcoin has no lost about 80 percent of its gains from the all-time high witnessed in December.
This has led cryptocurrency critics—or crypto bears, if you may—to reinforce their opinion that bitcoin is nothing more than a bubble. One of these forefront critics, Nouriel Roubini took to Twitter to declare that the so-called bitcoin bubble has now busted.
“With BTC down almost 80% from peak (from 20K to ~4K) & all other cryptocurrencies down 80% to 99% I rest my case that this crypto bubble went bust for good. I feel vindicated. So I will take a break for a few days from this toxic Crypto Twitter. Waste of time to convince zealots”
A bubble (also an economic bubble or asset bubble) is used to economic cycle characterized by the rapid escalation of asset prices followed by a contraction. It is usually created by an unsustainable surge in asset prices that does not tally with market fundamentals.
Bitcoin as an asset class is not backed by any physical commodity and has continued to intrigue conventional market observers. It has been termed highly speculative, and risky by economists in the past.
Roubini who has earned the title of “Dr. Doom” is a Professor at New York University and CEO of Roubini Macro Associates gained prominence after he apparently called the 2008 economic crisis. In the past, he has called the cryptocurrency revolution a myth and said blockchain technology that underpins bitcoin is only a ‘glorified excel sheet’.
Bitcoin [BTC] Price Watch
Bitcoin touched a new yearly low of $4,200 yesterday, its lowest position since October 2017. Bitcoin regained some ground and is currently trading at $4,619 still down 25 percent from the last 7 days according to data from CoinMarketCap.
Response to the latest Crypto Crash
To say the least, the cryptocurrency community appears shaken by the sudden dip in bitcoin price which has seen it lose more than 30 percent of its price since last week. The price slum which came after a period of rare stability in bitcoin market has sparked fears among BTC holders—some analyst suggests that holders who bought the coin at around $1,000 selling off out of panic.
Crypto analyst and presenter on CNBC, Ran Neuner mirrored the mood of community in a tweet. He wrote:
“Up until now even though we have been in a bear market we haven’t seen panic or capitulation. In the last few days, panic is clearly upon us.”
He joins a number of crypto analyst now looking for a new bottom bitcoin price after it shattered a crucial support at $5,500. “It’s a great signal that the bottom is near,” he tweeted.
But it’s not all doom and gloom as some crypto enthusiasts have shown defiance in support of bitcoin. Wall Street analyst and major crypto bull Tom Lee stood by a bullish $15,000 prediction for BTC by this year’s end. In an interview with CBNC, Lee admitted that the past few days have definitely been a negative development and said he was counting on institutional involvement to boost BTC price. He said Bitcoin’s fair value stands around $7,000.
Several crypto enthusiasts responded to Roubini’s tweet showing great support for bitcoin despite the present travails. One of them is Anthony Pompliano a notable member of the crypto community who challenged Roubini stating that bitcoin will regain its all-time high in four years. He wrote:
“You think it’s over? Put your money where your mouth is. I’ll donate $10k to charity if BTC doesn’t hit $20k in [the] next 4 years and you donate $10k if it does. You game???”