Bitcoin Price Could Reach Further Lows Below $6,000: Analyst
Ran Neu Ner, founder of Onchain Capital, and host of Cryptotrader on CNBC Africa was on CNBC’s Fast Money offering his prediction that bitcoin is likely to see further downward movement relative to the US dollar, possibly going as low as $5,900 USD.
The problem, according to Neu Ner, is not to do with any recent hacks to exchanges, the same way that any one bank being robbed does not mean that there is any problem with the US dollar. However, he frames Bitcoin as digital gold, and there needs to be a demand to underpin its value. That demand simply isn’t there yet, leading to Bitcoin’s current bear market. He did not provide any details on exactly how that demand should be created in order to counter the current trend.
Neu Ner’s advice going forward was that if you believe in blockchain technology’s potential to permeate into all business sectors, then its short-term ups and downs measured in weeks or even months should not matter. If Bitcoin’s value goes to 20, 40, or 80 thousand US dollars over a matter of years, then no one will care if they bought in at 6,000 dollars or 6,500 dollars. Only day traders working on scales of less than a year should be worried about the current dips in market value.
However, Neu Ner did offer that there was a significant milestone if Bitcoin should drop to $5,000 USD. This, according to him, is roughly where it becomes difficult for miners to maintain profitability in their operations. Falling below this point could cause mining operations to switch to other currencies or pull out of Bitcoin, leading to changes in the infrastructure of Bitcoin that might hinder its long-term viability. Neu Ner did not go into specifics about what exactly might be the consequences of Bitcoin being less profitable to mine, but it was clear that $5,000 USD was a price point to pay particular attention to.
It should be noted that Neu Ner’s analysis was narrowly constrained to Bitcoin, and he did not mention other cryptocurrencies. He spoke interchangeably about blockchain technology and Bitcoin, making it unclear whether or not he felt that Bitcoin underpinned the entirety of the cryptocurrency market, or if the cryptocurrency market would survive a significant Bitcoin crash. The alternate possibility of Bitcoin losing dominance and other cryptocurrencies filling the void was not discussed.
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