Crypto analysts in China have expressed pessimism over the cryptocurrency markets in the New Year according to state-run news outlet, The Beijing News. Most of the analysts were of the opinion that the mostly bear trend experienced in 2018 will continue in the 2019.
The Beijing News wrote:
“In 2018, bitcoin became an investment black hole. One of the reasons may be that there was too much increase in 2017 and the trend was reversed in 2018 […] Entering 2019, bitcoin prices are still showing signs of decline, and there is no obvious rebound. For the trend of Bitcoin in the new year, pessimism is more dominant.”
Mixed Views in 2019
Last year, bitcoin predictions were mostly positive coming on the back of an impressive 2019 in which bitcoin and several other cryptocurrencies recorded all-time highs in prices. By December, it was clear that those bullish predictions had failed as crypto markets barely survived prolonged downtrends for most parts of the year.
This time, crypto analysts are divided in their projections for 2019. Some die-hard supporter like Mike Novogratz of Galaxy Digital venture capital insist on by bullish predictions—he predicts that bitcoin price will reach new record highs this year. Some others are cautious with their predictions opting for a more long term outlook rather than a yearly prediction while others like the Chinese analysts have a bleak prospect for crypto.
Sun Hang: It will take long for Bitcoin to rebound
Sun Hang, a senior analyst at crypto investment firm TokenClub Institute, noted that the next major bitcoin price surged is hampered by an excess supply of bitcoin. Although bitcoin has a fixed maximum supply, there’s still about 20 percent of the bitcoins have not been mine yet.
“On the supply side, the projects in the digital currency market in 2018 are extremely rampant. From the business world, academia, media, exchanges, and many institutions that are somewhat famous in the society, they want to send out coins.”
He explained that due to this imbalance in demand and supply sides, it is unlikely that the bitcoin and digital currency markets will rebound significantly in the short term.
Xiao Lei: Madness of 2017 cannot happen in 2019
Xiao Lei, chief analyst of currency policy and dean of 500-gold research institute, noted that a pessimistic outlook was more dominant. “The best strategy is to calm the mind, involve a small amount of intervention, accept the volatility,” he advised investors adding that was about survival.
It is difficult to return to the madness of 2017, but it may be better than the situation in 2018 […] The price of bitcoin rose more than 20 times in 2017. That increase is definitely unsustainable,”
Huang Liang: People are shorting bitcoin
Yet another analyst simply referred to as Huang Liang echoed Lei’s sentiment that the spike in 2017 led to the reversal in 2018. “Early participants entered at a very low cost. At the high level, they have realized demand, and they continue to sell bitcoin, causing selling pressure.” He explained.
Describing the crypto market as a zero-Sum game; which means that “the money you earn can only come from the money in someone else’s pocket;” he noted that it was easier for people to bet against bitcoin.
“After bitcoin has been on the futures contract, everyone can not only do more bitcoin, but also make money by shorting bitcoin, which has spawned a large number of bitcoin forces,” Liang said.
Cryptocurrency Situation in China
Until crypto activities were banned in the country, China was the leading destination for cryptocurrency. Chinese government and experts in the country, however, still monitor cryptocurrency markets and projects very closely. The Chinese government through the Center for Information Industry Development (CCID) has maintained a monthly ranking of major cryptocurrency projects. As Smartereum reported, the latest release—for December 2018—rated EOS, Ethereum and Bitshares as the top three blockchain projects while dropped to the 19th place.