Ran Neu Ner, founder of Onchain Capital, and host of Cryptotrader on CNBC Africa was on CNBC’s Fast Money offering his prediction that bitcoin is likely to see further downward
movement relative to the US dollar, possibly going as low as $5,900 USD.
The problem, according to Neu Ner, is not to do with any recent hacks
to exchanges, the same way that any one bank being robbed does not mean
that there is any problem with the US dollar. However, he frames
Bitcoin as digital gold, and there needs to be a demand to underpin its
value. That demand simply isn’t there yet, leading to Bitcoin’s current
bear market. He did not provide any details on exactly how that demand
should be created in order to counter the current trend.
Neu Ner’s advice going forward was that if you believe in blockchain
technology’s potential to permeate into all business sectors, then its
short-term ups and downs measured in weeks or even months should not
matter. If Bitcoin’s value goes to 20, 40, or 80 thousand US dollars
over a matter of years, then no one will care if they bought in at 6,000
dollars or 6,500 dollars. Only day traders working on scales of less
than a year should be worried about the current dips in market value.
However, Neu Ner did offer that there was a significant milestone if
Bitcoin should drop to $5,000 USD. This, according to him, is roughly
where it becomes difficult for miners to maintain profitability in their
operations. Falling below this point could cause mining operations to
switch to other currencies or pull out of Bitcoin, leading to changes in
the infrastructure of Bitcoin that might hinder its long-term
viability. Neu Ner did not go into specifics about what exactly might be
the consequences of Bitcoin being less profitable to mine, but it was
clear that $5,000 USD was a price point to pay particular attention to.
It should be noted that Neu Ner’s analysis was narrowly constrained
to Bitcoin, and he did not mention other cryptocurrencies. He spoke
interchangeably about blockchain technology and Bitcoin, making it
unclear whether or not he felt that Bitcoin underpinned the entirety of
the cryptocurrency market, or if the cryptocurrency market would survive
a significant Bitcoin crash. The alternate possibility of Bitcoin
losing dominance and other cryptocurrencies filling the void was not
discussed.
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