Bubble and Crash is here to stay in the Bitcoin Market

Maheen Hernandez By Maheen Hernandez June 15, 2019 Off
crypto bubble

Will Bitcoin crash over again? The bust and boom cycles in the past two cycles had different streaks. The crypto market is filled with Booms and Busts. Bitcoin went from zero to nearly $150 in the year 2013. Then the value of the cryptocurrency fell to 60%, and it went up to $1,150.

In the year 2015, the price of the Bitcoin fell again, and the price went up to $20,000 by the end of the year 2017.  In 2018, the value of the cryptocurrency again went down and went down to $3,200, which is a loss of 85%.  In the year 2019, the ongoing market showed that Bitcoin had climbed up to $9,000, and the price is now hovering at $8,100.  The price of the Bitcoin could increase to $60,000 through $400,000 before it can crash back to 85% again.  These were expressed in Bloomberg.

The chances for a bubble and crash is forever there in the Bitcoin Market.  A lot of volatility is expected in the market with improvement in innovation and disruption of the crypto with radical ideas. However, there are going to be a few years of reasonable returns from this coin.  This can be a 20% profit as opposed to 85%.

Implied volatility percentages are reported to be 300% considering similar trading situations which existed in November 2017.  This has been further explained by Bloomberg that to buy Bitcoin, which is worth $8,000 for $10,000, you pay $2,200 to get the right to buy it.   If this contract should break even, the price of the Bitcoin should go up to $12,200, which is an increase of more than 50% in just one month.  In such a scenario if there were 25% changes for the price of Bitcoin to up above $10,000 and if it does touch the price, the expected price is $19,000, if it did not then the amount expected is $4,000.

Past rallies and correlation to indexes are methods to derive and plot the ranges in which the cryptocurrency might hover.  Cryptocurrency is technological stuff.  They work as a substitute for traditional finance.

Bitcoin always trends in positive and negative correlations. By looking at the past price trends and the boom and bust cycles, it can be safely derived that the next cycle is going to be different. Prices will swing, and that is not because the market has matured, and there are more investors, but because that is the way this asset works.

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