According to Invesco’s list of “unexpected but possible” results for 2022, Bitcoin could drop below $30,000 this year.
Paul Jackson, head of global asset allocation at the US investment firm, in a note on Monday, said that for Bitcoin “It reminds us of the activities of stockbrokers leading up to the 1929 crash” said.
Jackson, “We think it’s not too much of an exaggeration to imagine that Bitcoin has dropped below $30,000 this year.” He added that he believes the probability of this to happen is at least 30%.
Jackson said that Bitcoin could be seen as a financial frenzy, which means that big losses could be on the way soon. “A 45% loss in 12 months after the peak of a typical financial frenzy” used the phrases. If Bitcoin follows this scenario, its price will fall between $34,000 and $37,000 by October. However, Jackson noted that a steeper drop is possible and the digital asset could drop below $30,000.
Besides, Invesco strategist warned that this scenario is far from certain. “Last year we talked about how Bitcoin could drop below $10,000, but instead peaked at around $68,000,” he said.
Still, there are growing signs that investors are concerned about the outlook for Bitcoin and cryptocurrencies. Investment bank UBS also recently issued a note on whether the space is headed for a new “crypto winter”—a period when prices fell sharply and failed to recover for more than a year. According to UBS analysts led by James Malcolm, the Fed’s rate hikes in 2022 could undermine the attractiveness of cryptocurrencies like Bitcoin in the eyes of many investors.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.