Bitcoin could plunge below $30k in 2022, there are similarities to Wall Street Crash of 1929, says Invesco
New York (Jan 19) Bitcoin could drop below $30,000 this year, according to a report by Invesco, which points to similarities between today's crypto marketing campaigns and activities of stockbrokers in the run-up to the Great Depression.
"The mass marketing of bitcoin reminds us of the activity of stockbrokers in the run-up to the 1929 crash," said Invesco's global head of asset allocation Paul Jackson in a note on Monday. "We think it is not too much of a stretch to imagine bitcoin falling below $30,000 this year."
Jackson clarified that there is a 30% chance of that actually happening. Invesco's crypto note was part of the "improbable but possible" forecasts series.
If bitcoin mania ends up following in the footsteps of other manias, the next few years will be volatile for the world's largest cryptocurrency, the note stated. "A loss of 45% is experienced in the 12 months after the peak of a typical financial mania," Jackson wrote.
Bitcoin reached its latest new all-time high of $69,000 in November. Since then, it has been in consolidation mode, trying to hold the $40,000 level. At the time of writing, bitcoin was down nearly 40% from its all-time highs. At the time of writing, bitcoin was trading at $41,677.
If bitcoin is unable to hold the $40,000 support level, prices could decline to $34,000-$37,000 in the next nine months, Jackson said, warning that the selloff could accelerate even more.
|
|
The 'Black Swan' event that could wipe out your wealth and how to hedge against it |
However, nothing is set in stone, he pointed out, reminding investors that there were calls last year for bitcoin to drop below $10,000 that never came to be. "Last year, we spoke of bitcoin falling below $10,000, but instead it reached a peak of around $68,000," Jackson stated.
Invesco is the latest investment company to speak about the potential of even a deeper selloff. Earlier this week, UBS said there are growing signs of crypto winter, adding that the upcoming Federal Reserve rate hikes will weigh on bitcoin and its inflation-hedge appeal.
KitcoNews
