It is only to be expected that economists and other financial experts remain wary of Bitcoin and other cryptocurrencies at this stage. After the onslaught which traders have witnessed throughout most of 2018, the future price direction remains unclear. Economist Joost van der Burgt is confident Bitcoin will fall even further in value pretty soon.
Another Doom Scenario for Bitcoin
Anyone who has paid attention to Bitcoin price predictions over the past year may have noticed that financial ‘experts’ don’t expect a bright future for Bitcoin or other cryptocurrencies. That is not entirely surprising, especially considering that the year 2018 hasn’t been too positive so far. Even so, optimism remains in place overall, as bigger and better things seem on the horizon for this industry.
If economist Joost van der Burgt is to be believed, the future will not look all that bright. More specifically, he is confident that Bitcoin is still in a massive bubble as of right now. Assuming that is the case, this may only be the beginning of the profit-taking stage. This seems to indicate van der Burgt is confident the Bitcoin price will drop below $5,000 soon, although most market speculators envision an entirely different future.
Up to this point, there has been no evidence of Bitcoin or any other cryptocurrency being in a bubble. While it is true that volatility has reigned supreme throughout most of 2018, this is no different from how the market has evolved in the past few years. Bitcoin’s price is still relatively easy to manipulate, but it seems new regulatory developments will make cryptocurrency a lot more attractive to the mainstream.
According to van der Burgt, the Bitcoin “bubble” is now entering a euphoric stage. He compares the current cryptocurrency price trend with the buildup to the 2008 financial crisis. It’s a very interesting comparison, even though the 2008 financial crisis was triggered by a culmination of multiple factors, rather than hype for a specific project or offering.
The economist noted:
The euphoria phase is also when people start to borrow extensively to finance their investments. According to a recent survey, 18% of active bitcoin investors have financed their investments by credit card, and 22% of this group indicated that they have not yet paid off their credit card balance.
At the same time, one has to acknowledge cryptocurrencies are very different from any investment vehicle the world has seen before. While it may not necessarily become the new breed of global currencies, there appear to be many use cases for Bitcoin and other worthwhile currencies. That doesn’t mean every altcoin will succeed, but the future isn’t looking as gloomy as van der Burght would like people to believe.