Institutional investor hall of famer Rich Bernstein says Bitcoin could fall as much as 90 percent, just like some tech stocks did during the dot-com bubble of 1998 to 2000.
Bernstein called cryptocurrencies the “biggest financial bubble ever in history” when he spoke on CNBC’s Trading Nation.
Bitcoin has fallen 31 percent since its $67,000+ peak in November 2021 in a sell-off after news broke about the omicron coronavirus variant.
Bitcoin is still up 66 percent year to date, trading at $46,646.75, according to Coingecko data.
Bernstein speculated that a market meltdown in both stocks and crypto could resemble the tech bubble. It took 14 years for the Nasdaq 100 to break even if you invested in it on Dec. 31, 1999, he noted.
“I think one wants to wait to look at the true fundamentals and look at the valuations before deciding that this is all over,” Bernstein said.
Before founding Richard Bernstein Advisors LLC in 2009, Bernstein was chief investment strategist at Merrill Lynch & Co. and also worked at E.F. Hutton and Chase Econometrics/IDC.
In June, Bernstein rushed to own Bitcoin and warned that other cryptocurrencies are becoming a dangerous parabola.
He is not the only legendary investor to vehemently speak out against cryptocurrencies in recent times. Billionaire investor Warren Buffet has previously said “Bitcoin has no unique value at all”.
U.S. Treasury Secretary Janet Yellen said in February that Bitcoin is an extremely inefficient way of conducting transactions since it is often used for illicit finance, adding that people should be aware that it is highly speculative.
Despite thumbs-down reviews from famous investors, the market capitalization of crypto assets has grown tenfold since early 2020 to about $2.6 trillion and represents about 1 percent of global financial assets.
At the beginning of the pandemic, Bitcoin infamously halved in value on March 13, 2020, with critics ridiculing the “safe haven” status some analysts had attached to it.
The world’s largest cryptocurrency managed to pull off an impressive recovery that many believe was boosted by massive quantitative easing.
Listen to GHOGH with Jamarlin Martin | Episode 74: Jamarlin Martin Jamarlin returns for a new season of the GHOGH podcast to discuss Bitcoin, bubbles, and Biden. He talks about the risk factors for Bitcoin as an investment asset including origin risk, speculative market structure, regulatory, and environment. Are broader financial markets in a massive speculative bubble?
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