Bobby Lee said the history of Bitcoin is one of bubbles that burst and grow again
Given Ruvic / Reuters
- Bitcoin investors need to be more aware of the history of wealth with big booms and busts, Bobby Lee said.
- The Crypto Exchange founder said Bitcoin will likely continue to skyrocket, but then crash dramatically.
- However, Lee said he was optimistic about Bitcoin in the long run and viewed it as an inflationary hedge.
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Bitcoin investors should be more aware of the asset’s volatile history, with bubbles and dramatic price drops, said Bobby Lee, founder of the crypto exchange.
Lee told Insiders that Bitcoin’s history suggests it will continue to shoot, but then will likely crash dramatically “within a few hours.” He said Bitcoin could quickly lose 50% of its value and then keep falling for years to come.
Bitcoin rose in 2021, hitting an all-time high of nearly $ 62,000 in March, after falling below $ 4,000 in the same month last year.
According to analysts, the huge sums of money that have been pumped into economies by governments and central banks, which have supported asset prices across the board, have been a major driver.
Lee said Bitcoin could potentially soar to $ 300,000 in the latest bull market cycle. The co-founder of BTCC, one of the oldest crypto exchanges, said he was drawn to Bitcoin as a store of value when fiat currencies are at risk of depreciating due to monetary stimulus.
However, the entrepreneur, who recently wrote a book on Bitcoin, said buyers should be more aware of the extremely volatile past of the digital asset.
“A lot of investors get in without knowing the story,” he said. “That’s just life, right? People buy real estate without knowing the history of the real estate bubbles, people buy stocks without knowing the history of the stock market bubbles.”
He added, “Bitcoin history has shown that not only has it risen very quickly, but after every bubble the bubble bursts, after every bull market the bubble bursts and it falls quickly.”
Lee said Bitcoin could fall 50% quickly, “and then it will be a bear market for the next two or three years.” Sometimes it could even drop as much as 90% from previous highs, he said.
“When bitcoin winter comes, when it crosses the 50% sell-off, people lose their conviction and then people panic. They sell, and that’s why it keeps dropping and for two or three years sitting at this low level. ” . “
However, Lee said he remains optimistic about Bitcoin. “We just have to have the mental strength to hold on to what they call HODL … hold on for dear life.” He predicted that it could even hit $ 1 million if it kept boom-and-bust cycles.
Bitcoin continues to divide the financial world sharply, despite the fact that many investors and institutions have been drawn to the remarkable rally in the cryptocurrency. JPMorgan, Morgan Stanley, BlackRock, and Tesla are some of the top companies that need to get involved.
Bitcoin skeptics, however, argue that Bitcoin’s massive volatility means that institutional adoption will be limited. Many claim its rise was due to tremendous momentum and could stall if people return to their normal lives and spending patterns after the coronavirus pandemic.
They say it is set for a price drop similar to what it did after 2017, when Bitcoin fell from about $ 20,000 to $ 4,000 in just over a year.