Bitcoin's Volatility and Potential for Significant Decline Discussed by Experts

According to Cointelegraph, Bitcoin's inherent volatility remains a topic of concern, with BitMine chair Tom Lee cautioning that the cryptocurrency could potentially lose up to half its value under certain conditions. In a recent interview with crypto entrepreneur Anthony Pompliano, Lee expressed his belief that Bitcoin is still susceptible to significant drawdowns, stating, "I’m sure there will be 50% drawdowns." This perspective challenges the growing sentiment among market participants who argue that Bitcoin's volatility may decrease as spot Bitcoin ETFs and institutional interest contribute to market stability. Lee contends that Bitcoin continues to mirror the stock market's movements, often amplifying them. He noted that the stock market has experienced frequent 25% drawdowns, highlighting the progress made over the past six years despite these fluctuations. "The stock market has more frequent 25% drawdowns," Lee explained. "So if the S&P is down 20, Bitcoin could be down 40." Furthermore, Lee suggested that Bitcoin may be transitioning from its traditional four-year cycle, which would have indicated a peak in October, to a "longer cycle" that is now developing. In a separate discussion on the Bankless podcast, Lee reiterated his optimistic forecast for Bitcoin, predicting it could reach $200,000 to $250,000 by the end of the year. A 50% correction from such levels would bring Bitcoin's price down to approximately $125,000, close to its current all-time high. However, if Bitcoin has already peaked, as some proponents of the four-year cycle suggest, a 50% decline from its current price of $109,981 would result in a value of around $54,990, a level not seen since September 2024, according to CoinMarketCap. Veteran trader Peter Brandt has echoed similar bearish sentiments, comparing Bitcoin's price chart to the soybean market in the 1970s, which experienced a 50% decline. Historical data supports the possibility of such steep declines, as seen in November 2021 when Bitcoin reached a record high of $69,000 before plummeting approximately 50% to around $35,000 by late January 2022. Despite these concerns, some Bitcoin advocates remain optimistic about the future. Strategy chairman Michael Saylor, for instance, expressed confidence in June, stating, "Winter is not coming back."