Yesterday, Morgan Stanley released a new report warning clients about bitcoin and other cryptocurrencies. In the report, it compared bitcoin to the dot-com bubble that happened almost two decades ago.
Morgan Stanley looked at the price trends of bitcoin and that of NASDAQ and realized a common trend. At their most exuberant periods ahead of bear markets, the two rallied between 250% and 280%. Indeed, bitcoin’s moves are similar to the tech boom and bust but are happening much faster – at 15 times the speed.
The current bear movement is not new in cryptocurrencies. Since 2009, bitcoin has had four bear movements with price drops of between 28% and 92%. At the current price, bitcoin has dropped by about 70% from its peak of near $20,000. In each bearish wave, bitcoin tends to lose 45% to 50% of the value. At this time in 2000, the NASDAQ had five bear moves with each one averaging 44%.
Bitcoin is now trading at $8,380, higher than its weekly low of $7,600. The price could trade in a narrow range as traders digest the latest news that Twitter (along with Facebook and Google) will also ban crypto-related ads.
