Gabor Gurbacs: if BTC falls -50%, then investors will only be in the black
The new bull market in Bitcoin has made investors very happy. However, according to VanEck's director of digital assets, even the subsequent correction and loss of up to half of the current value of BTC is a good sign for cryptocurrency owners.
About the situation on the crypto market
According to Gabor Gurbacs, the current situation with Bitcoin is very interesting. BTC rose in value and set a new all-time high. According to the head of VanEck, this is due to the growing demand from institutional investors.
Because of this, the price skyrocketed much faster than in 2017. However, as Gabor Gurbax says, it is likely that the market will overheat and the price of the cryptocurrency could fall as low as -50%, but the Bitcoin holders will not be hurt. In the next round, the price increase will be even stronger.
Why a correction to -50% will benefit
Hedge funds, large companies and private investors have been actively buying BTC all year, preferring it to gold to preserve value amid significant fluctuations in fiat money. Moreover, many intend to go - to keep BTC as a strategic reserve for a long time - 5-20 years.
For such investors, temporary drawdowns in the price of cryptocurrencies do not cause much panic, and this does not entail massive sales, and hence speculation. And even if the bitcoin price corrects and loses 40-50 percent, hodlers won't panic.
The next 50%+ price drop will shake out weak hands and bring in the strongest hands we have ever seen.— Gabor Gurbacs (@gaborgurbacs) December 18, 2020
A correction to minus 50% will simply “shake out” the “weak links” from the ranks of investors and replace them with hodle investors and large institutions willing to take risks. They have additional working capital and capital to store bitcoins for years.
Forecast for the future
Seeing the growing capitalization, trading volumes, the price of bitcoin and the convulsions of the dying dollar, many investors are eager to grab a piece of the bitcoin pie before it's too late.
Against the background of high demand and a decrease in the volume of circulating assets, many will be willing to pay much more for BTC than the coin is worth now. And this is reasonable, because in the long term, Bitcoin can be worth millions.