Is Bitcoin Headed to Zero?
“40% of bitcoin investors are now underwater”
by Bob Stokes
Updated: May 11, 2022
Charlie Munger is Berkshire Hathaway's co-chairman, and on April 30 at the firm's shareholder meeting, he said:
[Bitcoin] is stupid because it's very likely to go to zero.
Berkshire Hathaway chairman Warren Buffet also expressed a negative sentiment toward the cryptocurrency.
Bitcoin's recent price action appears to support the views of the two billionaire investors, at least at this juncture.
Here's a CNBC headline from the evening of May 9:
Bitcoin dips below $30,000, drops more than 56% from its all-time high
Keep in mind that just days ago, the cryptocurrency was trading north of $40,000. The last time Bitcoin traded below $30,000 was last July. As you might imagine, many crypto investors were quite fearful then.
Indeed, a July 9, 2021 Bloomberg headline captured the sentiment of the global chief investment officer of a major financial firm:
Bitcoin 'Crash' Risks Taking Its Price Down to $10,000
However, the cryptocurrency's Elliott wave structure suggested that its price was poised to move higher. Our July 2021 Global Market Perspective said:
Bitcoin [is] at or near the end of its fourth wave-correction.
In other words, the then slide in Bitcoin's price was a countertrend move.
After that July 2021 low, Bitcoin went on to hit an all-time high of $68,906 in November 2021.
Of course, Bitcoin's price has taken a tumble once again.
Might this time be the time of a collapse?
It sure feels like it to a lot of investors (May 9, CNBC):
40% of bitcoin investors are now underwater, new data shows
These investors are naturally wondering, "what's next?"
Our recently published May Global Market Perspective once again provides an Elliott wave perspective on Bitcoin's price action.
Remember, Elliott waves are a direct reflection of the repetitive patterns of investor psychology and these patterns offer "predictive value," as noted by Frost & Prechter's Wall Street classic, Elliott Wave Principle: Key to Market Behavior.
This doesn't mean that Elliott waves guarantee an exact future price path of a financial market, yet, Elliott waves do offer context.
One thing's for sure, there's a wide chasm between Charlie Munger's comments that Bitcoin will likely go to zero and other forecasts that say Bitcoin is headed toward a million dollars.
Elliott waves help you to put the big Bitcoin picture into perspective.
You'll find our Bitcoin analysis [as well as analysis of other cryptocurrencies], which includes charts, commentary and a video, under the "Cryptocurrency" section in our May Global Market Perspective.
Click on the link below to access our cryptocurrency forecasts now.
Why It's Better to Follow the Trend than to "Beat the Market"
The reason is elementary: If the broad stock market falls 40% -- and your portfolio falls 25% -- you did "beat the market"...
...But your portfolio still got smaller.
At Elliott Wave International our approach is to keep subscribers on the right side of global market trends.
That means identifying the main trend, and alerting subscribers when the Elliott wave model suggests the trend will turn.
Learn what our team of experienced global analysts are telling subscribers about stock markets, cryptocurrencies, forex, crude oil, gold, silver, bonds and much more.
You can have our Global Market Perspective on your computer screen in just a few minutes as you follow the link below.
Global Market Perspective
Gives you clear and actionable analysis and forecasts for the world’s major financial markets.
Get insights for the U.S., European and Asian-Pacific main stock indexes, precious metals, forex pairs, cryptos (including Bitcoin), global interest rates, energy markets, cultural trends and more.
If a stock's price trend should reflect its fundamentals, PNC shares should have gone higher -- now see the forecast that got it right.
Our analysis of the altcoin Polkadot shows that you can avoid click-bait driven commentary on cryptos, and instead focus on the Elliott wave patterns that unfold on market price charts.
Down more than 25%, the NASDAQ is "officially" in bear-market territory. "Big whoop" as they used to say -- some of the hi-tech darlings have already been cut in half and then some. Bet the folks down 50% or more in their so-called investments are glad to hear they're "official." And now Bitcoin, the King of Cryptos, has hit an "air pocket" of its own and fallen below $30,000. Wonder if that's officially a bear market, too? This excerpt from our new, May Financial Forecast explains how it all fits together.