Bitcoin’s price may have started to stabilise today, hitting highs of approximately $36,540 (£26,820) after perilously plunging to a little north of $30,500 (£22,384) on Monday morning amid continuing crypto turbulence.
Bitcoin has since fallen slightly further and is trading at $34,698 (£25,452) as of 5.30pm GMT, CoinDesk data indicates.
Billionaire investor Mark Cuban last night compared the 2021 bitcoin boom to the 1990’s dot-com bubble.
He even predicted a large number of cryptocurrencies may not survive a coming crash, tweeting how the situation was, ”EXACTLY like the internet stock bubble.”
However, three industry experts remain sanguine about bitcoin’s prospects.
Kadan Stadelmann, CTO at Blockchain Solution Provider Komodo, told Express.co.uk it would be short-sight-sighted to write-off bitcoin’s resilience.
He said: “Bitcoin has experienced so many crashes throughout its short history yet remains resilient and always seems to come back stronger than ever.
“A sharp decline in price doesn’t change the narrative. Will we see a return to $4,000 for BTC like last March? Most likely not given the state of institutional adoption.
“Could we see a return to $15 to $20k as the floor? That seems like a more probable scenario, meaning Bitcoin’s average price point over time is only going up.
“Look at the big picture. The price is the same as it was just a week ago. Bitcoin is still well outperforming the S&P 500, gold, and other asset classes.
“Even with a sudden drop in price, BTC is easily the best performing asset class of the past decade.”
He added how the crypto’s recent history offers some reassurance.
Mr Stadelmann said: “Last time bitcoin had its dip after an all-time high, it led into the bloom of an altcoin season – traditionally on a bull run, bitcoin would make corrections of up to 40 percent – so far the dips on its rise have been less intense and we’ve normally assumed this to be because of the high institutional investment into our space.
“But seeing a dip like this may say that bitcoin may be no different no matter how big of a player you are.
“A key feature here in the markets we’re looking at is Bitcoin Dominance (BTC.D), in 2017 there was a sharp fall of this dominance and price action inflated all cryptocurrencies alternative to Bitcoin – a rising tide lifts all ships scenario.
“Interestingly enough BTC.D is still on the rise during this dip.”
Li Jun, Founder of Ontology, an open source blockchain specialising in decentralised identity and data, believes institutional investment could be key in avoiding another burst bubble.
He told Express.co.uk: “A correction is expected after a run like we have just experienced, but I think it is difficult for anyone to pinpoint an exact numerical value for BTC given the astronomical rise.
“It would be borderline foolish to make a specific price prediction, but I think at its core, you have to analyse where the new demand is coming from.
“Is it primarily institutions that continue to pour in money? If so, I don’t expect bitcoin to slow down at all.
“Positive yields from traditional investments will only further boost crypto investments because the yield will be reinvested as long as bitcoin remains its course on a steady climb.”
And Paolo Ardoino, CTO at Bitfinex, believes the Tuesday’s tentatively positive movements is cause for optimism
He told Express.co.uk: “Bitcoin has rebounded somewhat amid frenetic trade of the world’s biggest cryptocurrency.
“These markets will continue to test the leading cryptocurrency exchanges.
“As always, Bitfinex has demonstrated that its platform and infrastructure are reliable during moments of high volatility.
“While the growing interest of institutional investors in bitcoin is, of course, very topical of late, it is vital for exchanges and infrastructure providers to be on top of their game and their tech.”
However, UBS analysts have today taken a more pessimistic perspective.
The financial services firm wrote: “Given their high volatility and the size of their past drawdowns, cryptocurrencies might be attractive to speculative investors, but they are neither a suitable alternative to safe-haven assets, nor do they necessarily contribute to portfolio diversification,” they said in a note.
And the UK’s Financial Conduct Authority appeared to agree, announcing yesterday, “if consumers invest in these types of product, they should be prepared to lose all their money.”
The FCA added: ”Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.”