Stay up to date with the CriptoTendencia WhatsApp channel: Instant news about Bitcoin, Altcoins, DeFi, NFT, Blockchain and Metaverse. Subscribe!
According to MicroStrategy CEO Michael Saylor, the price of Bitcoin could plummet up to 80% by the end of the current cycle. However, the expert adds that this is a theoretical possibility that he does not believe will come to fruition for many reasons. He highlights in particular the fact that BTC now has a solid institutional presence.
The fact that large financial firms own the Cryptocurrency makes a deep crash really difficult. Unlike retail investors, institutional investors tend to have less volatile behavior. Thus, with a greater mass of coins in the hands of the latter, the price of the token is much less risky.
During an interview with Yahoo Finance, the businessman offered some details about the performance of MicroStrategy’s BTC purchases. In addition, he expressed that on personal terms he also maintains recurring purchases of Bitcoin to swell his own portfolios. Saylor’s investments, both personally and corporately, are made regardless of the price of BTC.
In the case of MicroStrategy, the firm has been raising capital through the issuance of debt and shares to buy more BTC despite the current high price. Thus, although Bitcoin could theoretically collapse, it would be a merely temporary situation in the same way as in all cycles.
Possible causes of a crash in the price of Bitcoin
In 2022, after a cycle in which the price of the cryptocurrency reached highs close to $70K, a major crash occurred. The exchange value of the coin dropped to $16,000 after several tragic events such as the collapse of Terra and the bankruptcy of the FTX exchange. Back then, massive sales caused the digital currency to enter a strong winter or bear market.
Is it possible that a similar situation could happen again? In theory, there is a chance for that to happen. However, according to Saylor, this is a much less likely context than in 2022. Large investors maintain healthier and safer custody firms, which nullifies the possibility of a giant going bankrupt.
The bankruptcy of Binance or Tether, for example, would cause a huge cataclysm. However, these companies seem consolidated after successfully overcoming the winter and now enjoy a great reputation.
“For this to happen, you need to have a group of very undercapitalized companies like FTX, Genesis, Celsius and BlockFi,” Saylor commented. In his opinion, there are currently no companies with those characteristics on the market. Therefore, the real possibility that the price of Bitcoin could crash is low.
Another of the black swans that could lead to a BTC collapse is that President Trump cannot finish his term. The latter could be for political reasons or due to his advanced age. By the middle of his term, in July 2026, the tycoon will be 80 years old. If any of these events occur before crypto regulation, the situation could be tragic for the price of Bitcoin.
Related
Crypto Keynote USA
For the Latest Crypto News, Follow ©KeynoteUSA on Twitter Or Google News.
