Following a blistering 80% decline from its peak this year, the brutal drop in the price of bitcoin BTCUSD, -0.86% has market participants wondering what’s next for the No.1 digital currency.
Given the a more than 20% drop over the past 36 hours, it might be the latter.
However, both camps are making their cases for the digital asset’s next move:
The bitcoin cheerleaders
One of the more prominent bitcoin bulls is Tom Lee, managing partner at Fundstrat Global Advisors. Lee, who held a year-end price target of $25,000 for bitcoin for the best part of the year, reduced it to $15,000 on Nov. 16.
In a research note, Lee said the depth of the decline has gone beyond market fundamentals. “While bitcoin broke below that psychologically important $6,000, this has led to a renewed wave of pessimism. But we believe the negative swing in sentiment is much worse than the fundamental implications,” he said.
Speaking on CNBC Tuesday, Lee admitted the recent decline “has definitely been a negative development.”
Another ultra bull is Nigel Green, founder and chief executive of U.K. consulting firm deVere group, said the two-day decline is a bargain investors don’t want to miss. “Savvy investors understand that digital currencies are the future of money and, as such, they will be capitalizing on the lower prices in order to build their portfolios and shore-up their positions,” he said.
Green said the selloff has fueled unnecessary criticism on the nascent technology. “Crypto cynics are using this current wave of volatility to knock digital currencies. Whether it is bitcoin, or any of the current generation of coins, or not, cryptocurrencies are here to stay,” he continued.
Another bitcoin bull, who believes the best trade at the moment is “long bitcoin, short bankers,” is Anthony Pompliano, the founder of Morgan Creek Digital.
In late August, Pompliano was a little more pragmatic, saying “we are likely to see bitcoin near $3,000 before we see Bitcoin at $10,000 again.”
Today, with bitcoin reeling anew, Pompliano admitted he was fielding an unusually high number of calls, but sought to ease their nerves by heading his morning research note with “Everyone breathe. The world is not ending.”
There’s no greater bitcoin critic than Nouriel Roubini, professor of economics at New York University.
Roubini has labeled bitcoin a scam, a bubble and everything in between. With the price of bitcoin spiraling lower, Roubini has picked up his Twitter game.
The Turkish-born economist has been taking numerous shots at so-called HODLers—those who hold their bitcoin through thick and thin—and on Twitter this morning the professor asked if they were still “buying the dip.”
Kenneth Rogoff, the former chief economist at the International Monetary Fund and now Harvard professor who in March told CNBC that bitcoin “will be worth a tiny fraction of what it is now,” adding that $100 is a lot more likely that $100,000 hasn’t changed his tune.
Speaking to MarketWatch, Rogoff said he remains very bearish on bitcoin, citing a lack of tolerance from regulators in dealing with anonymity as a hurdle too steep to climb for the nascent asset. The Harvard economist said transaction costs and a lack of comparative speed put it well behind traditional payment systems.
Rogoff said like most asset classes, a bitcoin surge is a nonzero probability. “You’re buying a lottery ticket and if it [bitcoin] proves to become a global standard on the level of a credit card or a currency then it will pay off,” he said.