The bitcoin price could surge as high as $300,000 in the latest bull-market rally, but could then plunge 90% into a “winter” lasting years, the founder of cryptocurrency exchange BTCC has warned.
Bobby Lee told CNBC’s “Squawk Box Asia” on Monday that 2021 is a bull market for bitcoin, of the sort that comes around every three or four years. Lee, who currently runs crypto wallet app Ballet, said 2013 and 2017 were also bull-market years in which the bitcoin price increased by 10 or 20 times.
He predicted the bitcoin price (BTC) would hit $100,000 by the summer and “potentially” $300,000 by the end of the year, “if history plays itself out again.”
However, Lee said “bull market cycles come and go.” He added: “After a bull market peak, inevitably it could go down by quite a bit, and that’s when the bubble bursts.”
Lee warned bitcoin could then enter a “winter” where the price stays low for two to three years. “So after it peaks out, whether it’s $200,000, $100,000 or $300,000, people should be aware that it could fall as much as 80% to 90% of its value from the all-time peak.”
Lee co-founded BTCC in 2011, making it one of the oldest cryptocurrency exchanges.
The bitcoin price has roughly doubled this year already to around $58,100 on Monday, down from a high of close to $62,000 a week ago. And it is up by almost 800% from March last year, when it tumbled as coronavirus started to batter the global economy.
Advocates say the world’s biggest cryptocurrency by market value will continue its remarkable run, as growing numbers of institutional investors become involved. They also argue bitcoin can act as a hedge against inflation, which many investors expect to rise.
But critics say bitcoin’s massive volatility means its institutional adoption will be limited. Many argue it is in a bubble driven by huge amounts of stimulus and is set for a price crash of the sort seen after 2017, when bitcoin plunged from around $20,000 to below $4,000 in just over a year.
“I don’t know if history will repeat itself, but what we do know is that bitcoin bull-market cycles come every 4 years and this is a big one,” Lee said.