In a recent interview, Ambrosus’ CEO, Angel Versetti, spoke about cryptocurrencies and if they are a bubble or not. He also said that it was too early to compare cryptocurrencies to a bubble.
Ever since cryptocurrencies started attracting mainstream media, the criticism of them being a bubble has exponentially increased. The criticism got stronger when Bitcoin touched its all-time high of $20,042 on December 17.
Speaking to The Independent, Versetti said that new technologies that are overvalued were mostly compared to bubbles. He added:
“While there are similarities in terms of overvalued new technology startups with unproven or unsustainable business models that were incessant in both dot-com and crypto, the sheer scale of crypto and dot-com businesses are not comparable. I do not believe we are, or were, anywhere close to a bubble with cryptocurrency.”
Bitcoin’s price has depreciated by approximately 80% since its previous high, and ever since the start of 2018, the price has been tumbling down non-stop. Although it has bounced back up a few times, the recent fall is huge. Versetti said that the prices for Bitcoin are undergoing a correction. He said:
“We are experiencing a strong correction, but the bubble has not formed yet. All the bankers and financiers jumping onto the crypto train signal that the bubble is yet to come. I think when all cryptocurrencies and tokens will be worth 15-20 trillion USD, that will be a bubble.”
In its 10-year history Bitcoin has suffered four major crashes. The first being in 2011, when Bitcoin slumped from $30 to $2 which was ~90% reduction in the prices, next comes the correction in 2013 where the price of Bitcoin plummeted from $2370 to $70, an overall decrease of ~70%.
The third one being the depreciation of price from $1200 to $168 which was again an 86% decrease. The fourth is the one we are currently facing. The price slump from $20,000 to $4237, which would at this point amount to a decrease of 78%.
Considering the above data, it could be speculated that the current direction Bitcoin’s price is taking is just a correction in the bear market and not bursting of a bubble.