Bitcoin: Expert discusses recent drop in cryptocurrency value
The value of the cryptocurrency started rising earlier this year, following a stormy few weeks that saw its price hit unprecedented highs and lows. Investors remain unsure over the currency’s long term sustainability, as major shifts in value lead to a volatile market. After seeing 20 percent of its value wiped off in just two days in March 2020, its price rose by more than $6,800 (£5,000) in 48 hours this month, ending January 7 on a final price of $41,000 (£30,000).
Despite some concerns with financial insiders, including those in Wall Street, the currency has been tipped to smash through $500,000 soon by Gemini crypto exchange founders Tyler and Cameron Winklevoss.
The twins, who launched Gemini in 2014, argued that it wasn’t a question of when the currency reaches that value “but how quickly”, as they exposed how Wall Street had been left “panicked” over its price.
Cameron explained that the price estimate of $500,000 was “pretty conservative” and the game “hasn’t even really started”, as he pinpointed how the Bitcoin market had shifted.
He said that the likes of MicroStrategy and other firms buying “significant amounts of Bitcoins” for their treasury reserves showed that investors were now ready to make their moves.
Bitcoin ‘made Wall Street panic’ as cryptocurrency boom expected to strike $500,000 (Image: GETTY)
Bitcoin: Experts predict the cryptocurrency could be around for a while (Image: GETTY)
Speaking on the What Bitcoin Did podcast, Cameron added: “What if every Fortune 100 or 500 company does that, what if central banks start doing that?
“It hasn’t even started.”
He added in October: “Wall Street is not here yet. Institutions aren’t in Bitcoin right now.
“It’s been a retail phenomenon for the last decade. So Wall Street talks about it, they’re aware of Bitcoin, but they’re not really in it from our perspective, but it’s starting to happen.”
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Bitcoin: The currency has ‘panicked insiders at Wall Street’ (Image: GETTY)
This prediction became true as Wall Street investors entered the world’s largest digital currency in their droves, with influential Bitcoin pioneer Max Keiser also admitting the panic he had witnessed from hedge fund managers desperately trying to get in on the action.
Business Telegraph reported that Mr Keiser said once American billionaire Paul Tudor Jones “fired the starting gun” and hedge fund managers “panic-bought to keep up” with him.
He cited examples of people including fellow billionaire Ray Dalio – a known critic of Bitcoin – who claimed last year that he “might be missing a trick” by not investing in the currency.
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Gemini crypto exchange founders Tyler and Cameron Winklevoss (Image: GETTY)
But Mr Keiser argued that Mr Dalio now “has no choice because his peers are making huge gains with Bitcoin”, adding: “So, if he doesn’t act soon he’ll lose clients to his competitors like Paul Tudor Jones.”
Although Wall Street appears to have now joined the shift towards the cryptocurrency, economist Burton Malkiel argued that a number of factors could still see Bitcoin collapse.
Mr Malkiel detailed in the newest edition of ‘A Random Walk Down Wall Street’ how the US government “can be expected to crack down on the use of Bitcoin” due to “illegal transactions”.
Bitcoin: Legendary economist Burton Malkiel (Image: GETTY)
He cited US President Franklin D Roosevelt who made it illegal for citizens to “hold gold” in 1933, as “all governments have been particular about their right to issue and control currencies”.
The icon also argued that because Bitcoin can use huge amounts of energy, the desire from within the White House could lead to even heavier policing.
Mr Malkiel added: “Since Bitcoin mining operations use considerable computer power and are energy-intensive, restrictions can be imposed on the computers that run the public distributed ledger central to the transactions network.
“Creating a single token requires as much electricity as the typical American house consumes in two years.”
Bitcoin: Wall Street in New York (Image: GETTY)
President-elect Joe Biden made it his campaign’s pledge to ensure the US does its bit to help turn the tide on climate change, which may lead to speculation that he could support such a move to halt Bitcoin.
Britain’s Financial Conduct Authority (FCA) warned: “If consumers invest, they should be prepared to lose all their money.
“Some investments advertising high returns from crypto assets may not be subject to regulation beyond anti-money laundering.
“Significant price volatility, combined with the difficulties valuing [Bitcoin] reliably, place consumers at a high risk of losses.”
Express.co.uk does not give financial advice. The journalists who worked on this article do not own Bitcoin.