Quinlan & Associates put out a massive report that should strike fear into the heart of every bitcoin owner.
The consultancy laid out a bear case for bitcoin that puts it at just $1,800 at the end of 2018 and $800 by 2020.
Quinlan & Associates, A wall street consultancy in their latest report titled "Fool's Gold: Unearthing The World of Cryptocurrency" has prdicted a massive crash in the value of bitcoin.
The report states that bitcoin which is currently valued at around $14000 is totally overvalued, whether in terms of an asset or as a currency.
The report states:
"As an asset, we valued Bitcoin using a cost of production approach and a store of value approach, resulting in values of USD 2,161 and USD 687 respectively. To value BTC as a currency, we estimated its utilization for both legal, retail transactions payments, as well as payments in the black market. After significant testing, we calculated the price of BTC 1 to be USD 1,780."
The report predicts that if the adoption of bicoin as a medium of exchange does not increase significantly then it is a bubble waiting to burst. they further predict that the cryptocrrency marketcap with suffer a 70% loss due to this.
Despite fulfilling most of the characteristics of a traditional fiat currency, cryptocurrencies are largely being utilized as speculative investment assets, leading to considerable volatility in their value," said Benjamin Quinlan, chief executive and managing partner, in a statement shared with Business Insider.
here is an illustration of their prediction:
The firm's long-term outlook for bitcoin is even more dreary. According to the report, it sees bitcoin trading at just $810 in 2020.
Still, it sees room for growth after the crash for the cryptocurrency market as a whole.
"While we anticipate valuations to decline in the short-term in response to the widespread unwinding of the digital currency space, the price of utility cryptocurrencies is likely to recover and dominate the market in the long-term," the report said.
It expects the cryptocurrency market to rebound - driven by those cryptos with a clear utility and reach $407 billion by 2020.
Disclaimer: The author of this article owns Bitcoin and other cryptocurrencies, This should not be treated as his personal view and investment advise
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