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GP Bullhound: Cryptocurrencies To Be Wiped Out On 90% Market Correction

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Investment bank GP Bullhound has warned of a potential 90% correction in the cryptocurrency market over the next 12 months. The correction, according to the firm, will wipe out a good number of virtual cryptocurrencies. They expect only a few to survive the onslaught.

Institution Investors Factor

According to GP Bullhound director Sebastian Markowsky, institutional investors are may look to enter the cryptocurrency market soon. The Rockefeller family has already hinted at the possibility of investing in cryptocurrencies and blockchain startups.

George Soros, another high profile institutional investor with a change of heart, is believed to be eyeing investment opportunities. Institutional investors flocking to the cryptocurrency space are expected to trigger an influx of retail investors. This should have a positive impact on cryptocurrency prices.

However, as the market starts to experience sharp pullbacks on rallying, short sellers could gain control pushing price lower, which could result in a 90% market correction.

“Nonetheless, once this ‘crypto-winter’ passes, the growth dynamics for the precious few survivors will be unprecedented,” Markowsky wrote in his report.

This is not the first bearish prediction for the ballooning virtual currency market. However, it is the most dovish. Billionaire investor Warren Buffett earlier this year warned that there would be a bad ending for most cryptocurrencies. Economist Nouriel Roubini has also warned that bitcoin, the most successful cryptocurrency, will crash to zero in the long run.

Amidst warnings, there are experts floating reasons as to why most cryptocurrencies could trade at higher valuations. Fundstrat co-founder Thomas Lee remains bullish about bitcoin’s prospects having issued a $25,000 price target for the year. Increasing regulation to trigger interconnectedness of the market, as well as the arrival of institutional money, is one of the catalysts driving prices higher.

ICOs to Flourish

According to Markowsky, Initial Coin Offerings will continue to flourish despite increased regulatory scrutiny. Last year the offerings raised over $4 billion. However, increased concerns that most of the touted projects have already collapsed continues to raise serious doubts about the future of ICOs.

Given the proliferation of ICOs scams, Markowsky expects investors to exercise caution when making investments in ICOs. Investing upon reading white paper should be a thing of the past moving forward as people will have to see actual product before putting their hard personal funds to use.

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