Bitcoin hovers near record highs, sparking fierce debate. Veteran trader Peter Brandt recently raised eyebrows with a stark warning. He suggested Bitcoin might plummet by 75%, mirroring its brutal 2021-2022 collapse. However, prominent crypto analysts swiftly countered this grim forecast. They deem such a severe crash “very unlikely” in today’s vastly different market.
Brandt Points to Historical Patterns
Brandt questioned Bitcoin’s trajectory on social media platform X. “Is Bitcoin $BTC following its 2022 script and setting up for a 75% correction? “Doesn’t hurt to ask this, does it?” he posted. His warning recalled a painful period. Bitcoin soared to $69,000 in November 2021. Subsequently, it crashed by roughly 76% over twelve months. Consequently, it bottomed near $16,195 by November 2022. Applying that same drop today would slash Bitcoin from $107,810 to around $26,000. That level hasn’t been seen since September 2023.
Stark Differences from 2021
Analysts overwhelmingly reject Brandt’s comparison. They stress the current environment differs profoundly from 2021. Pav Hundal, Swyftx’s lead analyst, expressed strong skepticism. “Never say never; it just feels very unlikely at the moment,” Hundal said.
He emphasised the changed macro fundamentals. “In 2022, we had an economic hangover from the COVID-era of money printing and stimulus,” Hundal explained. “The environment today is totally different,” he added. Remember, pandemic stimulus cheques fuelled early crypto adoption. An August 2021 survey revealed one in ten young Americans invested part of their cheques in crypto.
Unique 2021 Pressures Absent Today
Andy Edstrom, a Bitcoin author and analyst, partially acknowledged Brandt’s reasoning. He conceded a correction might occur. However, Edstrom firmly rejected the predicted 75% magnitude. “So far it is, but not the 75% magnitude,” Edstrom stated.
“Because the dip between the double tops this year was far less severe than in 2021.” He pinpointed unique 2021 pressures now absent. Edstrom said that cycle “was truncated” by FTX’s catastrophic collapse. The exchange failed disastrously, not filling customer orders properly. Instead, it allegedly sold customers worthless “paper” BTC. Edstrom also blamed the Federal Reserve’s sharp shift to hawkish policy. That move significantly tightened financial conditions then.
Current Policies and Sentiment
Simon Amery, Collective Shift’s senior research analyst, reinforced this view. He spoke directly about monetary policy. The Fed started winding down quantitative easing back in November 2021. Conversely, Amery noted policy is now “heading in the opposite direction”.
This means easing is more likely now. Furthermore, analyst Colin Talks Crypto doubts Bitcoin has even peaked. “Sentiment is pretty bad for this to be a top,” he observed. “There’s no euphoria on the timeline.” Hundal sees technical signals but remains unconvinced of disaster. Some analysis hints at a “big cyclical wash,” he admitted. However, all his evidence suggests Bitcoin is “sitting at an inflection point for easing conditions.”
Continued Growth
Prominent Bitcoin advocate Michael Saylor dismissed bearish predictions outright. “Winter is not coming back,” Saylor declared to Bloomberg. “We’re past that phase; if Bitcoin’s not going to zero, it’s going to $1 million.”
His statement captures the prevailing institutional optimism. Analysts contrast today’s potential easing with 2021’s tightening. Additionally, major financial players like BlackRock now embrace Bitcoin. The path seems set for growth, not collapse. While volatility persists, a 75% crash appears off the table. The market’s foundations look significantly stronger now. Investors should stay informed and manage risk wisely.
Written by Fazal Ul Vahab C H
