Bitcoin may surge to $300,000, however the bubble is more likely to pop dramatically, Bobby Lee mentioned.
The founding father of the BTCC alternate mentioned the value of bitcoin may fall as a lot as 90% from its peak.
Bitcoin has risen by about 800% in a yr, to roughly $58,000 within the newest bull-market cycle.
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The bitcoin worth may surge as excessive as $300,000 within the newest bull-market rally however then plunge 90% right into a “winter” lasting years, the founding father of the cryptocurrency alternate BTCC mentioned.
Bobby Lee informed CNBC’s “Squawk Field Asia” on Monday that 2021 is a bull marketplace for bitcoin, of the kind that comes round each three or 4 years. Lee, who runs the crypto pockets app Ballet, mentioned 2013 and 2017 had been additionally bull-market years during which the bitcoin worth elevated by 10 or 20 instances.
He predicted that the value of bitcoin would hit $100,000 by the summer season and “doubtlessly” $300,000 by the top of the yr “if historical past performs itself out once more.”
Nonetheless, Lee mentioned that “bull-market cycles come and go,” including that “after a bull-market peak inevitably it may go down by fairly a bit, and that is when the bubble bursts.”
Lee mentioned bitcoin may enter a “winter” the place the value stays low for 2 or three years. “So after it peaks out, whether or not it is $200,000, $100,000, or $300,000, individuals ought to be conscious that it may fall as a lot as 80% to 90% of its worth from the all-time peak,” he mentioned.
Lee cofounded BTCC in 2011, making it one of many oldest cryptocurrency exchanges.
The bitcoin worth has roughly doubled this yr, to about $58,100 on Monday, down from a excessive of near $62,000 per week in the past. It’s up by nearly 800% from final March, when it tumbled because the coronavirus outbreak began to batter the worldwide economic system.
Advocates say the world’s largest cryptocurrency by market worth will proceed its exceptional run, as institutional traders more and more turn into concerned. Additionally they argue that bitcoin can act as a hedge towards inflation, which many traders count on to rise.
However critics say bitcoin’s huge volatility means its institutional adoption might be restricted. Many argue that it’s in a bubble pushed by big quantities of stimulus and is ready for a worth crash just like after 2017, when bitcoin plunged beneath $4,000 from about $20,000 in simply over a yr.
“I do not know if historical past will repeat itself, however what we do know is that bitcoin bull-market cycles come each 4 years, and this can be a huge one,” Lee mentioned.
Learn extra: The CIO of a crypto hedge fund breaks down why bitcoin may rally as excessive as $400,000 in 2 years – and explains why he is additionally bullish on DeFi and NFTs