Wall Street Bank Morgan Stanley Likens Bitcoin to Dotcom Bust 🏛️🌐🚀 Morgan Stanley compared an accelerated timeline for bitcoin’s performance to the dotcom era. Sheena Shah, a Morgan Stanley market strategist, in a research report cited in CNBC, painted a potentially grim picture for the future of bitcoin, finding similarities in the price performance and volume levels with the tech-laden Nasdaq at the turn of the century. At one of its lowest times, the bursting of the tech bubble saw companies losing between $10 million and $30 million on a quarterly basis.
For bitcoin, however, it’s all unfolding in a flash. “Bitcoin price weakness has similarities to the Nasdaq in 2000, just occuring at around 15 times the speed,” said Shah.
For instance, Shah looked to market rallies, where both the Nasdaq and bitcoin advanced between 250% and 280% during their peaks foreshadowing declines. There were similar trends in trading volume between the index and the BTC price.
The following is an illustration from the Morgan Stanley report that was subsequently Tweeted by a WSJ reporter. While the time periods are different, with the Nasdaq’s plight unfolding over nearly a decade through 2002 and bitcoin’s activity reflecting a year, the chart appears to prove a pattern. If it’s a harbinger of things to come, the BTC price has not yet reached a floor.
Bitcoin’s rise and fall looks just like dot-com’s boom and bust…kind of. https://t.co/K0WtbwlsIHpic.twitter.com/S7KwymWfTx — Steven Russolillo (@srussolillo) March 19, 2018
Not so fast, other says, pointing to cracks in the analysis –
In the pantheon of #ChartCrimes this is hilariously bad analysis… https://t.co/EwtbShbDPs — James von Simson (@JvonSimson) March 19, 2018
Bitcoin Bear Markets
The Morgan Stanley strategist, meanwhile, pointed to four bear markets that bitcoin has endured since its debut in 2009, each of which lasted for an average of five months. During those pullbacks, the price has dropped anywhere from approximately 30% to more than 90% at its worst.
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