thecryptobasic.com
Peter Brandt, a notable market veteran, believes several Bitcoin traders could witness losses the next time BTC corrects.
Brandt disclosed this as he warned traders about the dangers of over-leverage and unrealistic expectations, calling attention to the need to prepare for the possibility of severe market corrections.
Brandt, who boasts over five decades of trading experience, pointed out the risks many investors face if they fail to account for potential downturns, particularly in the highly speculative crypto market.
A Bitcoin 50% Correction is Possible
The market veteran noted Bitcoin’s meteoric rise, spotlighting its incredible growth from $0.07 on Jan. 5, 2010, to about $98,000. This marked an astounding 1.4 million-fold increase or a 140,000,000% return.
On Jan 5, 2010 Bitcoin was at $.07
In 15 years, $BTC has advanced 1.4 MILLION-fold
Yet, many ppl are expecting a repeat
And many Zs and Ms expect trash_coins to be their redemption & ticket to riches
Go ahead, call me a hater (I own Bitcoin & SOL)
But I'm buying Kleenex stock— Peter Brandt (@PeterLBrandt) January 6, 2025
Despite the impressive run, Brandt warned against assuming such gains will continue indefinitely. Instead, he stressed that many traders, especially younger investors, are ill-prepared for the possibility of substantial corrections, which could wipe out unprepared participants.
Brandt suggested that there is a possibility that Bitcoin could experience a 50% correction at some point, while altcoins and meme tokens might face even harsher downturns, potentially falling 90% and 100%, respectively. For context, a 50% drop would take BTC to around $49,800.
I say this having witnessed markets for 50 years. Some will do great from here forward. But too many fools will get too leveraged, miss the top and get blown out in the next 50% correction in BTC, 90% correction in altcoins, 100% correction in memes https://t.co/o33Jnq4IHz
— Peter Brandt (@PeterLBrandt) January 6, 2025
Importantly, he did not predict these collapses but stressed that most traders fail to consider such possibilities in their risk management strategies. Notably, this oversight leaves them vulnerable to being “rekt” if such scenarios eventually unfold.
Bitcoin’s Diminishing Returns
Brandt’s recent commentary builds on his earlier observations from December 2024. He has been vocal about the diminishing returns in Bitcoin’s bull cycles over the years, describing the phenomenon as a “degeneration in magnitude.”
Although he acknowledged Bitcoin’s value as a hedge against fiat currency devaluation, he argued that its bloom as a revolutionary financial asset may be fading. He has consistently warned that Millennials and Gen Z investors harbor overly optimistic expectations about Bitcoin’s potential to create financial freedom.
This X post will not wear well
Bitcoin $BTC bull cycles have exponentially degenerated in magnitude$BTC is likely to remain a great hedge vs. fiat busts
But, the bloom is off the rose
Gen M & Zers who view $BTC as the road to financial glory are likely to be very dissappointed pic.twitter.com/kSq1hoW8N4— Peter Brandt (@PeterLBrandt) November 30, 2024
The market analyst argued that many individual stocks are likely to outperform Bitcoin over the next five to ten years, though he acknowledged there is a challenge in identifying the right stocks.
However, Brandt compared Bitcoin’s future prospects with other investments, maintaining that Bitcoin is still a more stable option compared to altcoins or meme tokens. Nonetheless, he reiterated that expecting exponential growth akin to Bitcoin’s early days is unrealistic given its current $1 trillion market capitalization.
Brandt Remains Bullish on Bitcoin
Despite these concerns, Brandt is bullish on Bitcoin in the mid-term. In December 2024, he noted that Bitcoin’s price relative to gold had reached an all-time high around 40 ounces.
Brandt predicted that the Bitcoin/Gold ratio could eventually hit 89:1. If this target is achieved and gold prices remain steady, Bitcoin’s value could rise to $234,000. Currently, Bitcoin trades for $99,712, with the BTC/Gold ratio now at 37.8.