Bitcoin is the “next big thing” but will crash like the dot-com bubble
With the ongoing volatility in the crypto market, there is uncertainty regarding the future of the sector; several analysts claim that the crash in 2022 is expected, and describe it as part of the growth trajectory.
Economist and HS Dent Publishing founder Harry Dent has argued that crypto is the “next big thing,” but the market’s growth will mirror the dot-com bubble that saw stocks like Amazon (NASDAQ: AMZN ) crash before rising to record highs , he said during a ‘Rich Dad Radio Show‘ performance on August 24.
According to Dent, the Bitcoin (BTC) crash could be interpreted as the end of the crypto market, but the economist emphasized that it would not be the case.
“I compare the cryptocurrencies, Bitcoin just like Amazon, the new dot-com retailers that were all the rage in the last part of the ’90s bubble, and were the epitome of that. Amazon led that bubble and crashed 95%… before it went to 3,500 in the next boom,” he said.
Furthermore, Dent shared how he got into crypto after initially failing to understand the concept. The economist declared:
“I didn’t get it myself, until a guy at my own conference defined crypto as the digitization of all financial assets and money. And I’m thinking, what’s bigger than GDP six, seven times, all the financial assets in the world? And I’m like, oh! This is a big deal. This is the next big thing.”
Established cryptocurrencies to stand out
In particular, the crypto markets host thousands of cryptocurrencies, and there is a general consensus that as the sector matures, established assets like Bitcoin will stand out, much like Amazon and the dot-com companies. At the same time, there is a belief that cryptocurrencies without utility will be wiped out.
Previously, Dent had predicted that there would be a historic market crash in 2022 amid rising inflation and the Federal Reserve’s tapering measures characterized by interest rate increases.
However, he pointed out that the crash does not need a trigger, just like the bursting of the tech bubble in 2000 which occurred in an environment without recession and economic downturn.
Bitcoin is likely to correct further
Interestingly, the economist also noted that Bitcoin would be the worst-hit asset while predicting that the crypto will correct to around $7,000.
It is worth mentioning that Bitcoin and the stock markets have struggled in 2022, with the flagship cryptocurrency struggling to stay above the $20,000 level.
Along these lines, Bitcoin’s problems were highlighted during the second quarter when it recorded its worst quarterly return of -56%. At press time, the asset was trading at $21,700, up nearly 2% over the past 24 hours.
Disclaimer: The content of this page should not be considered investment advice. Investment is speculative. When you invest, your capital is at risk.
