'Virtual Currency Winter is Coming'... "Prepare for Bitcoin to Fall Below $30,000"

Inflation Hedge Means Evaluation Weakens
Institutions' Investment Interest Declines
Goldman Sachs Predicts Bitcoin at $100,000

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] A warning has been issued that the 'cryptocurrency winter' is approaching. It is expected that the downturn may continue for some time. This claim contrasts with the investment bank Goldman Sachs' prediction that Bitcoin could reach $100,000. A Bitcoin expert also forecasted that it could fall below $30,000.

Investment bank UBS recently published a report stating that the hedging function against rising inflation is diminishing, and due to technical flaws and strengthened regulations, the 'cryptocurrency winter' is approaching.

Previously, Bitcoin experienced a 'winter' between late 2017 and early 2018, plunging from $20,000 to $4,000.

James Malcolm, a UBS analyst, pointed out that the Federal Reserve's (Fed) interest rate hikes are factors that could lower Bitcoin's value. He forecasted a reversal of last year's Fed stimulus measures that had driven Bitcoin prices up. The belief that Bitcoin is an investment tool for inflation hedging is being shaken.

Analyst Malcolm stated, "Among cryptocurrency investors, the perception is spreading that investing is difficult due to Bitcoin's high volatility and limited supply."

Cryptocurrency expert Laurent Kshis, a CEC Capital analyst, also predicted that institutional investors' interest in cryptocurrencies is declining, making a rebound unlikely in the near future. Kshis explained that $4 billion flowed out from Bitcoin-related exchange-traded funds (ETFs) in January alone, while inflows amounted to only $1 billion.

UBS also negatively evaluated that Bitcoin's blockchain is based on a decentralized design, resulting in low scalability.

The signs of regulatory tightening by authorities cannot be ignored. UBS forecasted that regulatory authorities will soon impose strong regulations on stablecoins and DeFi.

The opinion of investment firm Invesco is similar. Invesco diagnosed that it is not impossible for Bitcoin to fall below $30,000. Investment strategist Paul Jackson claimed that Bitcoin could exhibit movements similar to the 'Black Monday' stock market crash of 1929. Jackson explained that Bitcoin prices have typically undergone a correction of about 45% within 12 months from their peak.

Applying Jackson's claim to the recent Bitcoin peak of $68,000, price formation around $34,000 to $37,000 is expected by October. However, Jackson advised preparing for a larger decline and the possibility of a plunge below $30,000.

Meanwhile, on the day, Bitcoin was trading at $42,275, down 1.79%, and Ethereum was trading at $3,221, down 3.36%.

This content was produced with the assistance of AI translation services.