Bobby Lee said the history of bitcoin was among bubbles bursting and growing again
Dado Ruvic/Reuters
Bitcoin investors need to be aware of the strength 's history of large booms and busts, Bobby Lee said.The crypto exchange creator said bitcoin is likely to shoot up further but then crash dramatically.Yet Lee said he’s optimistic about bitcoin long-term, viewing it as an inflationary hedge. Sign up here to our everyday publication, 10 Things Before the Opening Bell.
Bitcoin investors need to be more attentive to the asset's explosive history of bubbles and dramatic price crashes, crypto exchange creator Bobby Lee has said.
Lee told Insider that bitcoin's history suggests it’s going to continue shooting upward but then is likely to crash radically "within a few hours. " He said bitcoin may rapidly lose 50 percent of its worth and might then fall further over the coming years.
Bitcoin has soared in 2021, reaching an all-time high close to $62,000 in March, after falling under $4,000 at the exact identical month a year previously.
Participants said that the huge amounts of cash pumped to economies by governments and central banks – which have affirmed asset prices across the board – have been a key driver.
Lee said bitcoin could go to $300,000 from the latest bull market cycle. The cofounder of BTCC, among the oldest crypto exchanges, said he's drawn to bitcoin as a store of value at a time when fiat currencies threat losing value as a result of financial stimulus.
However, the entrepreneur, who has recently written a book about bitcoin, said purchasers need to be more conscious of the digital asset'so hugely volatile beyond .
"A lot of investors are getting in without understanding the history," he said. "That's just life, right? People buy property, not understanding the history of property bubbles, folks buy shares, not understanding about the history of stock market bubbles. "
He included: "Bitcoin history has proven not only has it risen really fast, but after every bubble, the bubble bursts, after every bull market, the bubble does burst and it quickly falls. "
Lee said bitcoin could fall 50 percent rapidly, "and then it'll be a bear market for the next two, three years. " At times, it could even fall up to 90 percent from previous highs, he said.
"When bitcoin winter stems, as it strikes the 50 percent sell-off, that's when folks drop conviction and then people dread. They market, and that's what causes it to go down much farther and sit at the reduced level for a couple of years. "
Yet, Lee said that he remained optimistic concerning bitcoin. "We just have to have the emotional fortitude to carry onto it, what they predict HODL… hold on for dear life. " He predicted that it could hit $1 million if it proceeds to go through boom-and-bust cycles.
Bitcoin continues to sharply split the monetary world, although many investors and institutions have been drawn to the cryptocurrency's rally that was remarkable. JPMorgan, Morgan Stanley, BlackRock, and Tesla are a number of the key corporations to get involved.
However, bitcoin skeptics argue that bitcoin'so enormous volatility means its institutional adoption is going to be restricted . Many argue its rise has been driven by huge amounts of stimulation and might falter once people return to normal lifestyle and spending patterns following the coronavirus pandemic.
They state it’s set to get a price crash very similar to following 2017, if bitcoin plunged below $4,000 from approximately $20,000 within a year.
Read the first article on Business Insider
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