- Bitcoin regained territory on Tuesday to claim a price of $36,000 after going to about $30,000 on Monday as volatility continued.
- The business leader and investor Mark Cuban tweeted a comment that the price explosion of more than 340% was “EXACTLY like the dotcom stock bubble” of the 90s.
- Cuban claimed Ethereum and Bitcoin could survive the bubble bursting. But other investors, like those at UBS, voiced skepticism.
Bitcoin increased this Tuesday to around $36,000 as the crypto market regained from Monday’s downturn. But volatility is staying high, and the business leader Mark Cuban is claiming the recent rise is a “bubble” that could be disastrous.
Bitcoin catapulted down 20% on Sunday and Monday, to right above $30,000, in a trend of selling after the asset’s amazing rally. Investor anxiety and a strong dollar also damaged confidence.
But its price-tag increased quickly on Monday evening and Tuesday morning, going to around 8% and breaking through $36,000 again. It claimed an intraday number of $36,610.11 before paring gains to $34,154.29.
Bitcoin has gone up by more than 13% in this week, 92% this month, and about 340% this year, after governments and banks have flooded markets with cash during the pandemic.
The incredible rise in cryptos has gained the attention from all kinds of investors. For example, on Monday, Mark Cuban claimed on Twitter that the “cryptos trend” is “EXACTLY like the dotcom bubble” of the 90s, which busted with terrible consequences for wall street and companies in the tech industry.
But he went on to say Ethereum, Bitcoin, and “a few more” could get through it and thrive as Amazon and eBay did through the dotcom bust.
He sent out another tweet to warn investors against trusting crypto fans who “try to explain away whatever the daily price is.”
“All the explanations about fiat are just sales talk. The biggest one is scarcity vs demand.” he said.
But Bitcoin fans say this is a very different situation, claiming that a crash like 2018 – when Bitcoin hit a record of around $19,900 but went down to $5,870 in two months – is not likely to happen.
Cofounder of Nickel Digital Asset Management, Michael Hall, has said that Bitcoin “is going through upside volatility which could sharply reverse but tends to correct somewhat quickly at greater levels as price discovery happens.”
“We don’t see any underlying change in the forecast for Bitcoin which is now being owned at an increasing rate by long term investors, with a slant towards North America and Europe, looking to hold the asset inside larger portfolios,” Hall said.
UBS analysts took a darker view. “Given their great volatility and the numbers of their previous downturns, cryptos might attract speculative investors, but they are not a good alternative to safer assets, nor do they help with portfolio diversification,” they claimed in a memo.
On Monday, the UK’s Financial Conduct Authority stated that “if investors buy in these types of investment, they should be ready to lose all their capital.”
“Significant price changes in cryptos, along with the inherent problems of pricing those assets, puts investors at a high risk of losing,” it added.