Technology Investment Bank, GP Bullhound said on a report that cryptocurrencies would experience a 90 percent “heavy correction” which will lead to a mass market wipe out.
In GP Bullhound’s “Token Frenzy: The Fuel of the Blockchain,” they focused on the current state of cryptocurrencies, blockchain technology, initial coin offerings (ICO) and what was in store for the future.
One of their predictions is cryptocurrencies will have a 90 percent correction within the next 12 months with only very few companies surviving.
A director of GP Bullhound, Sebastian Marowsky, is the principal author of the report. He mentioned that institutional investors are likely to come into the market to drive the price higher. Other retail investors will also be expected to buy cryptocurrencies at a much higher value.
The market foresees a “sharp fall” this year, which will aggravate the selling. Therefore, causing panic and the eventual correction.
Marowsky also wrote in the report that once the “crypto-winter” passes, the growth dynamic for the few survivors will be unprecedented.
Over a thousand cryptocurrencies are currently in the market, and new ones are created every time. Bitcoin is now the largest by market capitalization, succeeded by ethereum and ripple.
These cryptocurrencies hit record highs at the end of last year, but their markets fell in the first quarter of 2018. Despite this, they are slowly starting to recover based on current statistics.
The fate of cryptocurrencies has been the course of the debate over the past year. Economist, Nouriel Roubini said that bitcoin would fall to zero. Meanwhile, Warren Buffett also gave a pessimistic view on cryptocurrencies.
Despite the predictions, there are others who root for the rise of cryptocurrency. Thomas Lee, the co-founder and head of research at Fundstrat said bitcoin could reach a value of $25,000 this year, a 172 percent increase from its current $6,440 value.