Home Markets Here’s the worst-case scenario for the Bitcoin and Crypto markets, according to analyst Benjamin Cowen

Here’s the worst-case scenario for the Bitcoin and Crypto markets, according to analyst Benjamin Cowen

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Here’s the worst-case scenario for the Bitcoin and Crypto markets, according to analyst Benjamin Cowen

Analyst Benjamin Cowen details a potential worst-case scenario for Bitcoin and crypto markets in general.

In a new video to his 765,000 YouTube subscribers, Cowen examines the infamous dot-com bubble burst for clues about where digital asset markets might end up.

Looking at the total market capitalization of all crypto assets, the analyst says the current pullback may continue to drop to around $760 billion.

At this point, Cowen says a 60% rebound would be commensurate with a rebound seen in the dot-com era, bringing the total market cap back to the $1 trillion level.

If and when that happens, Cowen says the markets will land in a very sticky spot.

“If we get a 60% bounce off a future low – let’s say it happens at the end of the year – a lot of people would assume that’s the low and to some extent I would probably assume that is the hollow…

But we must always remember that there is nothing certain when it comes to investing, there is always a risk you are taking no matter how confident you are that something is going to play out.

And if that were to play out the same way as the dotcom bubble, then that next low, you would still see from that point another 27% drop to the actual bottom.

Source: Benjamin Cowen/YouTube

If this market structure materializes, the total market capitalization of all cryptocurrencies would eventually bottom out at around $500 billion.

Cowen warns that there is never certainty in the markets, and says bulls can consistently argue that Bitcoin’s bottom has already been reached.

He tells traders that it’s never a bad idea to keep some cash on hand in case the markets go down more than you think is likely or possible.

“It’s something to consider. It’s a worst-case scenario. I have no idea if it’s going to play out or not, but it’s something I think everyone should consider when making browsing the cryptoverse.

I think a lot of people have burned in the past. You need to learn your lesson if you haven’t already and understand the downside risk that comes with cryptocurrency. If we see another leg down, it’s going to take a lot of people by surprise.

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Disclaimer: Opinions expressed on The Daily Hodl are not investment advice. Investors should do their due diligence before making high-risk investments in Bitcoin, cryptocurrency or digital assets. Please note that your transfers and transactions are at your own risk and any loss you may incur is your responsibility. The Daily Hodl does not recommend the buying or selling of cryptocurrencies or digital assets, nor is The Daily Hodl an investment adviser. Please note that The Daily Hodl engages in affiliate marketing.

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