Bitcoin has not escaped its volatile nature, and can still lose up to half its value under certain circumstances, warns Tom Lee, president of BitMine.
“I'm sure there will be 50% withdrawals,” Lee said during an interview published Thursday with cryptocurrency entrepreneur Anthony Pompliano.
There has been a growing number of market participants recently who have argued that Bitcoin will no longer be so volatile, as Bitcoin ETFs and institutional interests provide greater stability in the market.
However, Lee argues that Bitcoin (BTC) still tracks the stock market and often exaggerates its movements.
“The stock market has frequent 25% drawdowns,” he said. “The stock market has made a lot of progress over the past six years; we've had an unusually large amount of drawdowns of 25%,” Lee added.
“If the S&P falls by 20, the price of Bitcoin may fall by 40,” he said.
A “longer cycle” is developing in the future for Bitcoin
Lee also argued that Bitcoin has broken away from its typical four-year cycle, which would have marked a peak in October, suggesting instead that a “longer cycle” is now developing for Bitcoin.
Speaking on the Bankless podcast earlier this month, Lee reiterated his prediction that Bitcoin would reach $200,000 to $250,000 by the end of the year.
A 50% correction from this level would take Bitcoin's price back to roughly $125,000, near the current all-time high.
If bitcoin has indeed peaked, as some believers in a four-year cycle suggest, a 50% decline from its current price of $109,981 would drop it to around $54,990, a level not seen since September 2024, according to CoinMarketCap.
Peter Brandt recently echoed similar sentiments
He's not the only analyst recently to make such bearish claims, with veteran trader Peter Brandt recently echoing similar sentiments.
Brandt recently said that Bitcoin's price chart reflects a similar pattern to the soybean market in the 1970s before it fell 50%.
Related to: Bitcoin Whales Add 40x Leverage to Bitcoin Sell Trades Ahead of Trump's Announcement
Such sharp declines in Bitcoin have happened before in a matter of months. In November 2021, Bitcoin reached a record high of $69,000 before falling nearly 50% to around $35,000 in just over three months by late January 2022.
Other Bitcoin advocates are confident that the downside will not be as drastic in the future.
“Winter is not coming back,” chief strategy officer Michael Saylor said in June.
magazine: Cliff Bought Two Houses with Bitcoin Mortgages: Smart…or Crazy?
