Well-known cryptocurrency analyst Benjamin Cowen said that the dot-com bubble of the late 1990s gave us a glimpse of what the bottom of the cryptocurrency market might look like.
Cowen in new video inform His 738,000 YouTube subscribers are the worst-case scenario possible for crypto during the current decline, with Bitcoin (BTC) dropping more than half of its all-time high.
“If you look at what happened to the Nasdaq in 2000, you can see that it was actually 83% revised. This is an 83% correction. Now for those of you who don’t like the idea of cryptographic fixes or think it can’t happen, it can happen and it seems to happen every few years.”
For cryptocurrencies, Cowen says the chances of an 80% drop are very high.
“We’re going to see an 80% correction, so let’s not assume it can’t happen given that it’s already happened multiple times in the crypto asset class. The Nasdaq plummeted 83% and ultimately found a macro bottom and then bounced back. And of course we had a financial crisis that led to another bottom… Remember. We made it look like it was a floor, but it wasn’t.”
Global encryption at the time of writing market cap Cowen says the new asset class could drop to $500 billion in value in the worst-case scenario.
“Remember, the Nasdaq fell 83%, 83%, from around $3 trillion. Now where would you put the entire asset class? teaHat sets the asset class to a market cap of around $500 billion.
Sometimes I struggle to understand asset classes that have a market cap of only $500 billion, but that’s not unreasonable considering that not so long ago the entire asset class was $3 trillion and now $1.26 trillion. Let’s assume that around $500 billion can’t be reduced further by 40%. I think it’s the absolute worst-case scenario.”
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