I Wouldn't Touch Bitcoin, Risk of Collapse Too Big
Currencies / Bitcoin Dec 23, 2017 - 03:28 PM GMTBy: EWI
Bitcoin's 50% crash was not entirely unexpected
"Wild" doesn't begin to describe Bitcoin's price action. This spring, it traded as low as $1200. Last week, BTC futures topped $20,000.
Yesterday (December 21), in an article by newsmax.com, Elliott Prechter warned about Bitcoin's future:
Elliott Prechter: I Wouldn't Touch Bitcoin, Risk of Collapse Too Big
Thursday, 21 Dec 2017 10:38 AM
"We provided the first financial publication in the world that discussed Bitcoin when it traded at 6 cents in 2010. Amidst obscurity, skepticism and disinterest, we explained the currency and said it had great potential," says Prechter.
Today, however, he says if you aren't already in the game when it comes to bitcoin, you might be better off sitting this one out.
"Bitcoin had great potential in 2010, but not in 2018. With today's elevated prices, manic psychology and weak fundamentals, I wouldn't touch it. The risk that it could collapse is too great."
Prechter says bitcoin could prove to be as fragile as a flower, or more specifically a tulip, comparing the bitcoin phenomena to the 1600s tulip mania in the Netherlands.
Then, the next day, Bitcoin crashed (just as Prechter had warned), reaching a low of $10,400 on cash exchanges.
When powerful new technologies emerge, they attract droves of investors. We saw it with the internet sector in the late 1990s. At the time, we described it as a bubble in the making.
Obviously the internet survived the bubble--and now thrives. But many investors' portfolios didn't.
We expect the same with Bitcoin. The blockchain technology that's behind it and other cryptocurrencies holds great potential. But unprepared investors, oblivious to the big picture, will see -- and have already seen -- their positions get run over.
That doesn't have to be you. You can be among the few prepared investors who understands what truly drives price swings in the crypto market.
We have two ways to help. The Theorist continues to cover the big-picture cryptocurrency trend -- and in fact, a Financial Forecast Service subscription, of which the Theorist is a part, will continue to show you exactly how the Bitcoin bubble is a preview of the still-larger financial markets mania.
And for speculators who dare to dip their toe in these fast-moving waters, we've just launched Cryptocurrency Pro Service. It delivers daily and intraday Bitcoin forecasts, with plans to add more cryptos soon. Learn more about Cryptocurrency Pro Service.
One thing's for sure. When there's this much volatility in a market, the opportunities -- and risks -- are huge. More than ever before, you need to know what the Elliott waves are saying.
Whatever your level of interest in Bitcoin and cryptos, we've got you covered.
This article was syndicated by Elliott Wave International and was originally published under the headline I Wouldn't Touch Bitcoin, Risk of Collapse Too Big. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
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