Bitcoin PRICE SHOCK: Stark warning cryptocurrency could ‘CRASH’ faster than dot-com bubble
Getty Bitcoin is currently going through a tumultuous price period
Morgan Stanley likened the current market climate of Bitcoin to the dot-com bubble that, during its most “exuberant” period rose by 250 to 280 per cent - however analysts have stated that the cryptocurrency’s timeline is accelerating much faster. Morgan Stanley strategist, Sheena Shah, stated: "Just that the bitcoin rally was around 15 times the speed.” Bitcoin is currently going through a tumultuous price period that has seen it plunge by 21.02 per cent in the last month. At the time of writing the cryptocurrency is worth $8,593.84.
Ms Shah stated that the similar behaviour between dot-com and Bitcoin could mean that history is repeating itself, meaning that the cryptocurrency could soon crash. Bitcoin has seen bare markets, periods in which share prices fall that encourage investors to sell, that has demonstrated the sheer volatility of the virtual money. Four bare markets have hit Bitcoin that have shaved roughly 45 to 50 per cent off its value every time. Ms Shah detailed that this is very similar to the five declines of the dot-com bubble before it burst.
Cryptocurrency price: A year in charts Mon, March 12, 2018 Compare crypto currencies (Ripple, Bitcoin, Ethereum, LiteCoin) on value, market cap and supply for the past year Play slideshow coindesk.com 1 of 10 LiteCoin is going down with the market dip
She continued: "The Nasdaq's bear market from 2000 had five price declines, averaging a surprisingly similar amount of 44 percent.” "The follow-up rally for both bitcoin and the Nasdaq always saw falling trading volumes. "Rising trade volumes are thus not an indication of more investor activity but instead a rush to get out." Morgan Stanley declared that the correlation of trends between Bitcoin and the dot-com era is “an interesting development”.
The analysis from the financial giant could cause a new period of worry from crypto investors. During Bitcoin’s last bear market, it was noticed that crypto token Tether was used for significant Bitcoin trading. This marks a change from the US dollar, China yuan and Japan’s yen that usually dominate the currencies used for crypto trade.
Getty Bitcoin's price could crash faster than dot-com did almost 20 years ago
Getty Bitcoin has seen bare markets that have demonstrated the sheer volatility of the virtual money