Blockchain venture capitalist and Partner at Blockchain Capital, Spencer Bogart, believes that the price of Bitcoin and other cryptocurrencies may drop “artificially lower” due to an impending sell-off from the crypto hedge funds that popped up during Bitcoin’s bull run throughout 2017.
While speaking in an interview with CNBC, Bogart, whose firm Blockchain Capital invests “exclusively in the crypto and blockchain industry,” warned that potential “forced selling” could create an environment for additional downwards movement.
“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.”
Investors flocked to the hedge funds in droves seeking to reap the financial gains of the crypto market’s bull run. However, now that the price has gone south, Bogart fears the same investors are going to seek to get out of the hedge funds. He continued:
“[Clients are] saying, ‘hey, I want to redeem out of that fund.’ 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.”
Bogart says there are “hundreds” of these hedge funds that started during the bull run that are at risk of having clients cash out in droves. Still, Bogart remains bullish on cryptocurrencies and Bitcoin in general, saying that he expects the selling pressure to be only temporary.
In fact, Bogart less than a month ago said he expects Bitcoin to reach $10,000 this year:
"Could Bitcoin trade lower? Certainly. But do I think it will be higher a year from now? Absolutely… I would bet Bitcoin ends at least above $10,000 in the year.”
Bitcoin is currently trading at $6,195 at the time of this writing, after rebounding from a new 2018 low of $5,787.