Seamus Rocca, the CEO of Xapo Bank, expressed concerns about the future of Bitcoin, noting that the market for the first cryptocurrency remains influenced by a four-year cycle. In his opinion, despite the widespread belief that the crypto market has already overcome traditional cycles, these historical patterns continue to operate, and a future decline could occur even without global catastrophes.
This is reported by Finway
Psychological Factors and Lack of Drivers
Rocca believes that a bear market could begin due to natural reasons rather than major shocks. He emphasized that a decrease in the information backdrop, insufficient industry development, or changes in investment portfolios could lead to a decline in Bitcoin’s value.
“We all want to think of Bitcoin as a hedge against inflation, and I believe it will become one. But for now, I don’t see that. For me, it is still a risky asset. At least, the correlation between Bitcoin, the S&P, and stocks is still evident,” Rocca said.
He also added that the lack of significant news could create a “burnout” effect in the market, where participant activity gradually fades. This contradicts the position of some investors who are convinced that with the arrival of institutions, cyclical declines are a thing of the past.
Views of Other Experts and Market Risks
Rocca stated that the increasing role of institutions does not negate the fundamental psychological mechanisms that influence Bitcoin’s price. This view is shared by other experts, including analyst Matthew Kratter and author of the book “The Bitcoin Budo” Alexander Svetski. They believe that market cyclicality is primarily driven by human behavior rather than the properties of the asset.
The venture firm Breed also warned that excessive debt burdens on Bitcoin companies could lead to the onset of the next bear trend. However, if such companies finance their Bitcoin purchases mainly through equity rather than loans, the risks for the market will be lower.
Rocca concluded that Bitcoin’s history continues to be shaped around a four-year cycle, which includes updates to historical highs followed by significant corrections. The involvement of institutions is merely another phase within the usual model, not its conclusion.
It is worth noting that on July 11, Bitcoin reached a new all-time high, rising to $118,400.