A Wall Street consultancy is predicting a massive crash in the cryptocurrency market this year.
The original article by Ogwu Osaemezu Emmanuel has been edited here for length (…) and clarity ([ ]) by munKNEE.com to provide a fast & easy read.
Quinlan & Associates’ 156-page report titled “Fool’s Gold: Unearthing The World of Cryptocurrency” states that the current bitcoin price above $14,000 is a bubble and does not reflect the true worth of the cryptocurrency and makes a case for bitcoin dropping to $1,800 by December 2018.
Below is an illustration of the consultancy’s prediction:
The report reads, in part:
- “As an asset, we valued Bitcoin using a cost of production approach and a store of value approach, resulting in values of $2,161 and $687 respectively. To value BTC as a currency, we estimated its utilization for both legal, retail transaction payments, as well as payments in the black market. After significant testing, we calculated the price of BTC to be $1,780.”
- “Despite fulfilling most of the characteristics of a traditional fiat currency, cryptocurrencies are largely being utilized as speculative investment assets, leading to considerable volatility in their value” …[maintaining that] the price of bitcoin is just a flash in the pan and will crash in 2018 to the $1,800 price region if the cryptocurrency is not officially adopted as legal tender.
- “While we anticipate valuations to decline in the short-term in response to the widespread unwinding of the digital currency space, the price of utility cryptocurrencies is likely to recover and dominate the market in the long-term.”
- and the fall of bitcoin would in turn collapse the total cryptocurrency market capitalization to $223 billion which is a dreary 70% drop from its current position around $740 billion.
- That being said, it still sees room for growth after the crash for the cryptocurrency market as a whole…[forecasting that Bitcoin] will rebound — driven by those cryptos with a clear utility — and reach $407 billion by 2020.
In the short term, Quinlan Associates sees nothing but a period of a critical bloodbath for bitcoin and the crypto ecosystem as a whole…
The firm’s long-term outlook for bitcoin is even more dreary. According to the report, it sees bitcoin trading at just $810 in 2020!
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