Bitcoin bounced back Monday after falling below $6,000 on Friday. But blockchain venture capitalist Spencer Bogart, who said he’s “super bullish on crypto right now,” told CNBC that prices will likely go lower.
“If we go back to the summer of 2017, when crypto prices were booming, there was about a 100, 200, maybe 300 new crypto hedge funds that were formed,” Bogart, who is a partner at Blockchain Capital in San Francisco, said on “
Bogart explained that one year later, many of these funds are “hitting their one-year lock up.” That means that with the price of several cryptocurrencies down more than 50 percent, many liquid providers — the people who act as intermediaries between the broker and the exchange — are looking to sell.
“They’re saying, ‘hey, I want to redeem out of that fund,'” Bogart said. “That means forced selling on behalf of all of these new crypto funds that have popped up. I think that could take prices artificially lower.”
Bitcoin, which fell below $6,000 on Friday for the first time since February, reached an all time high of around $19,500 last December. That’s a decline of nearly 70 percent. And it’s not just bitcoin. Ethereum, litecoin, bitcoin cash and ripple are down for the year as well.
But crypto traders were optimistic on Monday when the digital coin bounced back — albeit just slightly — to around $6,254 Monday 5:30 p.m. ET.
Brian Kelly, CEO of BKCM LLC, an investment firm focused on digital currencies, said it’s “still early,” but added he saw the first signs of bitcoin making a comeback on Monday, including “quite a bit of demand coming from Asia.”
“We saw bitcoin hit new lows; I think we went to $5,779,” Kelly said on “
Kelly said $5,900 is the cost of mining the underlying blockchain technology and therefore, “there’s an incentive for miners to keep that price [of bitcoin] above that level.”
Bogart said many ICOs, or initial coin offerings — a crowdfunding way to raise funds for cryptocurrency ventures — in the market today are overvalued. But he pointed out that the price for bitcoin is “pretty good right now” if investors are thinking short term.
While some investors are waiting to see if bitcoin will go even lower before buying, Bogart doesn’t think that’s a good strategy.
“Most people that are going to wait for lower prices will end up paying higher prices than they are today,” he said. “So I think the right move is to not try and time the market and try and average into it.”
WATCH: Crypto trader Brian Kelly talks about a possible bitcoin bottom
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