Bitcoin entrepreneur and evangelist Vinny Lingham has warned any quick price rises could trigger “another bubble” in the virtual currency.
In a blog post on Monday, Lingham wrote that a bull run in the event of the first Bitcoin ETF getting approval could have longer-term detrimental effects than many envisage:
“I quickly realized there was bigger issue [than the ETFs] at play here — the upcoming potential for another Bitcoin bubble!”
As Bitcoin price currently hovers around $1200, Lingham believes the price already includes around $150 of optimism over the ETF successfully surviving March 11.
A positive decision would send Bitcoin price towards $2000 with a $1300 floor. However, growth may not stop there, and any further advances would reintroduce volatility and a bubble mentality, similar to what happened in 2013.
“I’m hoping this post serves as a warning to those who are welcoming another spike in Bitcoin. $1300 is a significant psychological price point,” he continued.
“This is the point that arguably no one who had previously bought coins during the last “bubble” is under water. Sure, some people may have taken some losses and sold the coins, but as a whole everyone who didn’t believe in Bitcoin now starts to believe again. Therein lies the danger.”
Lingham, meanwhile, has authored many posts on the future of Bitcoin and how to ensure its use is sustained and manageable, leading to decreased volatility and successful use cases.
During a price surge caused by Chinese trading in early January, Lingham tweeted that Bitcoin should become first a store of value, secondly proven as a digital commodity and only then adopted as a digital currency.
Phase 1 of Bitcoin (2008-2016) = Creating a Digital Commodity. Phase 2 = Proving it as a Store of Value. Phase 3 = Adopting it as a Currency
— Vinny Lingham (@VinnyLingham) January 4, 2017
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