Bitcoin prices could reach $300,000 soon — but then sink into a dark period, if history is any gauge, according to one expert.
Bobby Lee, co-founder and former CEO of crypto exchange BTCC, told CNBC Asiain a Monday interview that bitcoin tends to operate in four-year bull cycles, with big jumps in 2013, 2017 and this year’s most recent surge representing the latest uptrend for the world’s most prominent crypto.
However, if the pattern holds true, a fallow period for the asset created in 2009 is also likely to follow that could last two or three years, “if history plays itself out again,”Lee told CNBC, adding that he isn’t certain “history will repeat itself” but notes that that the nascent ascent since its inception has thus far followed a predictable pattern.
“I don’t know if history will repeat itself but what we do know is that bitcoin bull market cycles come every four years and this is a big one,” Lee said.
Lee predicted that bitcoin could hit $100,000 by the end of the summer and possible touch $300,000 by the end of 2021.
After a possible 10x surge by bitcoin at the end of the year, it is likely to come crashing back down to Earth, if it adheres to moves in its past two other bull phases.
To be sure, bitcoin’s bullish trading patterns over the past decade don’t offer up a statistically robust sample size, but it may be something that upbeat investors cling to, at least, until values crater.
“Bull-market cycles come and go and after a bull-market peak, inevitably it can go down by quite a bit and that’s when the bubble bursts,” Lee said.
Bitcoin is up 96% so far in 2021, compared with a nearly 7% year-to-date gain for the Dow Jones Industrial Average,a 5% rise for the S&P 500 index,a 4% gain for the Nasdaq Composite Index and an over 8% decline for gold,FactSet data show.
“In the crypto industry, we call it bitcoin winter and it can last for two to three years. So after it peaks out…people should be aware that it could fall as much as 80% to 90% of its value from the all-time peak,” he explained.
At last check, bitcoin was trading at $56,728, off less than 1% on Monday and not far from its recent all-time high at $61,556.59, according to CoinDesk.