After months of tranquility that became the envy of equity investors, The biggest cryptocurrency roared back into the public consciousness this week with the biggest sell-off since August, another fork and a cameo in a major semiconductor earnings report. Some digital asset industry pundits have already begun referring to it as the crypto winter.
Bloomberg Intelligence says the drama’s just starting. Analysts predict the price could fall to $1,500, which would indicate another drop of more than 70 percent from current levels. The digital token tumbled 12 percent on Wednesday alone to its lowest level in over a year, and has lost more than 60 percent of its value so far this year. Many of Bitcoin’s closest peers, including XRP, the cryptocurrency also known as Ripple, fell in tandem.
“I didn’t sleep well last night,” Travis Kling, founder of the hedge fund Ikigai, said on Thursday as he tracked the Bitcoin Cash split. “There’s a small chance that, it’s difficult to estimate, that something really bad could happen related to Bitcoin Cash that could then impact the entire crypto market.”
Some investors believe that two versions of Bitcoin Cash, which had broken off the original Bitcoin in 2017, could be sucking investment and miners away from the largest cryptocurrency.
That rang true to Mike McGlone, the Bloomberg Intelligence analyst who warned that the slide could get much worse. The slump “was sparked by the pump for the Bitcoin Cash hard fork,” said McGlone. “That pump that began a few weeks ago, got the market a bit too offsides with speculative longs playing for the good-old days. But this is an enduring bear market.”