In order to value bitcoin and predict future prices, analysts at Barclays came up with a model that likens it to an infectious disease. Like flu season, the mania around cryptocurrency and subsequent price spikes could be coming to an end.
“Like infection, transmission – especially to those with ‘fear of missing out’ – is by word-of-month, via blogs, news reports and personal anecdotes,” Barclays analyst Joseph Abate wrote in a note to clients Tuesday. “However, once full adoption is approached, the price decline is sustained and rapid.”
Bitcoin has fallen by more than 50 percent in 2018, trading near $6,742 as of 8:48 a.m. ET after starting this year above $14,000, according to data from CoinDesk. The cryptocurrency rose more than 1,300 percent last year, reaching a peak near $20,000 in December.
The Barclays model suggests that awareness around cryptocurrencies is now almost universal, and only a small group of the population could now catch speculative interest, and buy in. Current holders are also developing “immunity” to more investment, Barclays analysts said.
“We believe the speculative froth phase of cryptocurrency investment – and perhaps peak prices – may have passed,” Abate said. The model splits the global population into three sectors: Those who are susceptible, those who are vulnerable but not yet infected, and those who are immune. Read more from cnbc.com…
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