Following the inundating waves of FUD due to concerns of government regulation, the cryptocurrency world is still struggling to recover from the market “crash” last week. At about 11:00 AM (UTC) today, the market experienced yet another decline – albeit not as severe as the one last week – shedding 14.8% of its value to go from $574 billion to $489 billion.
The price of Bitcoin dropped below the $200 billion mark once again, and its price went as low as $10,240 to threaten the $10,000 mark. This move saw Bitcoin go below its 100-day moving average of $10,990 – the second time in less than a week. This decline in the price of Bitcoin is starting to worry a lot of investors, and there has even been reports of investors looking to put their money in gold instead.
According to David Garrity, chief executive officer at GVA Research LLC, Bitcoin’s price could go as low as $5,000.
“Well I’m just doing it more on a broad sense of seeing what the general levels from which there are actual moves over the last six months,” said Garrity, in an interview with Bloomberg.
“Arguing to the extent, we had seen sort of this meteoric rise in the fourth quarter going on to almost $20,000 again. Now we’ve had more of an institutionalisation of the market with the introduction of the futures trading coming out of the CME and the CBOE.”
How CME and CBOE Affected Cryptocurrency Prices
The launch of CME and CBOE Bitcoin futures about month ago is perhaps one of the main reasons for the recent instability in the cryptocurrency market. Ever since the launch of the two major Bitcoin futures contracts, the price of Bitcoin has been on a rollercoaster ride, going as high as $20,078 at one point and losing over 50% of that to hit $9,529 after the alleged South Korea crackdown a week ago.
“As I said, we aren’t necessarily at a point at a fully blown market to the extent that we can go out and short bitcoin outright,” Garrity added. “But at least we can use the futures markets to try and approximate synthetic shorts in the regard.”
Nevertheless, Garrity believes that as more and more institutional investors hop on the cryptocurrency bandwagon, it will gain more legitimacy and the price will start to stabilize.
Garrity is not the only one who is bearish about Bitcoin. Peter Boockvar, a long-time investor on Wall Street, has issued a warning about an impending “epic crash” in the cryptocurrency market. In an interview with CNBC, Boockvar predicted that the value of Bitcoin can dropped to between $1,000 to $3,000.
Still, things are looking good for cryptocurrencies. According to the London Block Exchange, one in three British millennials will have invested in a cryptocurrency by 2020.