UBS Researcher: Bitcoin Bulls Who Want All-Time BTC Price Highs Again Have to Wait 22 More Years
The cryptocurrency market, while being a decade old already, is still in its infancy. The predictions and patterns in the market are still evolving, though the recent upturn in Bitcoin’s price above the $5,000 price level has gotten a lot of positive attention.
Unfortunately, there are still many people who are apprehensive about the changes, considering that the cause is not clear.
According to reports from Markets Insider, the collapse of cryptocurrency’s prices lately has been much like the other bubbles experienced with this economy, based on reports from UBS analyst Kevin Dennean.
According to the figure below, provided by Markets Insider, the collapse of Bitcoin has been a lot like some of the other massive bubbles in the economy, like the Dow Jones crash in 1929, the Nikkei crash of 1989, the NASDAQ crash of 200, Oil’s demise in 2008 and even the Shanghai A-shares of 2015.
According to Dennean, the bulls of cryptocurrency often look to the other bubbles that have happened in the market, along with their recoveries, to try and predict what will happen with Bitcoin. He says that they argue that Bitcoin has already gone through the phase of the bubble and is prepared to rise up like other entities already have.
However, Dennean does not believe that the actual recovery of cryptocurrency will happen soon. Based on the patterns of other asset bubbles to see recovery back to peak levels, the recovery will not happen at a fast pace.
Even the Dow Jones Industrials took a full 22 years to come back. Other than the events in Shanghai, all of the aforementioned asset groups came down at least 75% from their former peak, and only NASDAQ and Dow Jones managed to actually reach their former levels.
Nikkei collapsed almost 30 years ago, and it still is only trading at about half of the peak level that it once held. Dennean warned that it would be better to “consider what happens after the bubble – not every bubble that bursts recovers the old highs.”
A cynic of cryptocurrency, UBS chief economist Paul Donovan, commented that anyone would choose to be a skeptic of the industry, following the same path that Nouriel Roubini has gone.
The economist commented that the habits of traditional finance should not even be a concern of the crypto industry, calling for the industry to bury the coin.
— CNBC's Fast Money (@CNBCFastMoney) November 29, 2018
At this time, Bitcoin is trading at $5,290.990, rising just under 1% in the last 24 hours. For the most part, the token has seen a fairly slow and steady incline over the last few weeks since passing the $5,000 price level.