By Elliott Wave International
Charlie Munger is Berkshire Hathaway’s co-chairman, and on April 30 at the firm’s shareholder meeting, he said:
[Bitcoin] is stupid because it’s very likely to go to zero.
Berkshire Hathaway chairman Warren Buffet also expressed a negative sentiment toward the cryptocurrency.
Bitcoin’s recent price action appears to support the views of the two billionaire investors, at least at this juncture.
Here’s a CNBC headline from the evening of May 9:
Bitcoin dips below $30,000, drops more than 56% from its all-time high
Keep in mind that just days ago, the cryptocurrency was trading north of $40,000. The last time Bitcoin traded below $30,000 was last July. As you might imagine, many crypto investors were quite fearful then.
Indeed, a July 9, 2021 Bloomberg headline captured the sentiment of the global chief investment officer of a major financial firm:
Bitcoin ‘Crash’ Risks Taking Its Price Down to $10,000
However, the cryptocurrency’s Elliott wave structure suggested that its price was poised to move higher. The July 2021 Global Market Perspective, an Elliott Wave International monthly publication which provides analysis of 50-plus worldwide markets, said:
Bitcoin [is] at or near the end of its fourth wave-correction.
In other words, the then slide in Bitcoin’s price was a countertrend move.
After that July 2021 low, Bitcoin went on to hit an all-time high of $68,906 in November 2021.
Of course, Bitcoin’s price has taken a tumble once again.
Might this time be the time of a collapse?
It sure feels like it to a lot of investors (May 9, CNBC):
40% of bitcoin investors are now underwater, new data shows
These investors are naturally wondering, “what’s next?”
The recently published May Global Market Perspective once again provides an Elliott wave perspective on Bitcoin’s price action.
Remember, Elliott waves are a direct reflection of the repetitive patterns of investor psychology and these patterns offer “predictive value,” as noted by Frost & Prechter’s Wall Street classic, Elliott Wave Principle: Key to Market Behavior.
This doesn’t mean that Elliott waves guarantee an exact future price path of a financial market, yet, Elliott waves do offer context.
One thing’s for sure, there’s a wide chasm between Charlie Munger’s comments that Bitcoin will likely go to zero and other forecasts that say Bitcoin is headed toward a million dollars.
Elliott waves help you to put the big Bitcoin picture into perspective.
You’ll find our Bitcoin analysis [as well as analysis of other cryptocurrencies], which includes charts, commentary and a video, under the “Cryptocurrency” section in the May Global Market Perspective.
Here’s the good news: Now through May 18, you can test-drive the Global Market Perspective for only $9. That’s a $50 savings!
See what Elliott Wave International’s global analysts anticipate next for 50-plus global markets: U.S., European and Asian-Pacific stocks, FX, cryptos, bonds, oil, gold and much more.
Learn more about this rare chance to test-drive the Global Market Perspective for only $9 — which means access to the May 2022 issue — by following this link.