Just as dramatic the downturn in bitcoin’s price above the weekend, history indicates future returns will likely be greater.
Bitcoin fell about 20 percent over the weekend, before recovering much of its losses. The previous four circumstances bitcoin has fallen more than 20 percent this year, it has gained the average 28 percent in both weeks following, regarding to digital forex trading company Genesis Global Trading.
Four weeks out, the digital currency has gained the average 61.5 percent, the info showed.
Bitcoin performance in the weeks after a drop greater than 20%
Source: Genesis Global Trading
The digital currency plunged to a low of $5,507 this weekend amid uncertainty over bitcoin’s future. Developers have disagreed over the best way to improve bitcoin’s purchase speeds and costs, resulting in splits in the digital currency.
After lots of developers last Wednesday called off an upgrade proposal called SegWit2x, investors started obtaining “bitcoin cash,” the bitcoin offshoot formed in August. Another alternative version of bitcoin, “bitcoin gold,” launched Sunday in an effort to make the process of fabricating, or “mining,” the digital currency less dependent on specialized hardware.
The original bitcoin has proved resilient up to now this year. Bitcoin strike record highs following the August split into bitcoin and bitcoin funds. Bitcoin also more than recovered from a $2,000 drop in September after a Chinese crackdown on digital currencies. Digital currency enthusiasts attribute the gains to growing interest from institutional investors, specifically as the planned start of bitcoin futures afterwards this year may allow other items like a bitcoin exchange-exchanged fund to launch.
Bitcoin this year
Bitcoin traded more than 9 percent higher close to $6,392 Monday afternoon, according to CoinDesk.
Fundstrat’s Tom Lee predicts bitcoin could hit $25,000 or more by 2022. Previous Fortress hedge fund manager Mike Novogratz also said on CNBC’s “Fast Funds” in October that bitcoin will likely top $10,000 in the next six to 10 months.
But that’s no promise that bitcoin will keep rising.
Novogratz has also said the digital currency “will likely be the most significant bubble of our lifetimes.” He’s just willing to bet on benefits on the way up, before a crash.
– With reporting by CNBC’s Seema Mody.