Profits that makes investors scared. Why the cryptocurrency market is overheated

Experts break stereotypes about the current market situation, and give forecasts regarding capital outflow from the crypto assets

A bullish (up) trend rules Bitcoin today. 3 months of 2021 led to a doubling of the price of BTC and even more. In total, at the moment, the growth in value is over 150%. Bobby Lee, co-founder and ex-CEO of the BTCC crypto exchange, believes that the most popular cryptocurrency will continue to grow steadily to $ 300,000, and then the price will gradually decline for several years in a row.

1/3 of this forecast should become reality in the summer of 2021. Lee suggests that in a couple of months we will be watching Bitcoin at $ 100K. Among other predictions on the hot topic, Canadian investor and TV personality Kevin O’Leary is promising $ 20 trillion in capitalization for BTS. Kraken CEO Jesse Powell is even more optimistic with 1 BTS = $ 1M in 10 years.

When will the price rise stop?

Several other experts recommend caution when dealing with populist predictions. For example, Janis Kivkulis, a leading strategist at EXANTE, focuses on the unpredictability of the growth ceiling. He cites the situation at the end of 2017 as proof. But it confirms the high probability of a scenario with a prolonged price decline after a trend reversal. Grigory Klumov, founder of the stable cryptocurrency platform STASIS, also joins the skepticism about Bobby Lee’s statements.

Is there a bubble or not?

Grigory Klumov continues the topic with the understanding of the “bubble”. He explains that the bubble has to do with the alternative investment sector rather than the crypto world. Today everything that is ready to invest money is becoming more expensive: elite cars, art objects, big houses.

Klumov’s thoughts are based on the fact that the real rate on many deposits is lower than inflation at the moment. Bonds practically do not generate income, and the benefits from shares are low. Almost any more or less experienced investor will recognize this. Accordingly, people ready to choose alternative investments for generous long-term benefits.

What is special about digital assets? Unlike stocks on an exchange, they are traded for a full day, 24 hours. The alternatives in this field work less quickly because expensive cars and valuable paintings take a long time to find a buyer. The point of outflow of investments from the crypto sector will begin immediately after the moment when the real rate exceeds zero. Until that happens, digital money is the thing to buy.To summarize, the crypto market is overheated, but there is no “bubble” situation, according to the same Janis Kivkulis. There is no disregard for the subject of discussion today, in comparison with the concepts of “pyramid” or “dot-com bubble”. The “bubble” itself is more indicative of the attitude towards the topic in the stock market. This is a natural resistance related to the interest of large funds in digital money.

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