Bitcoin may be entering a correction phase that is just beginning. The entire crypto sector could be headed towards a significant downtrend similar to what was seen in 2022.
In an interview with CoinDesk, Quinn Thompson, founder of crypto hedge fund Lekker Capital, predicted that Bitcoin could drop to a price in the range of $50,000 to $59,999 by the end of the year. This would represent a substantial decline from the current level of around $83,000 and a nearly 50% decrease from the peak of over $109,000 just over two months ago.
Thompson noted that the market conditions are different this time, with a slow grind down rather than sudden crashes or liquidations, which could make the decline more painful and shocking for investors.
Thompson, who has been bearish on the market from higher levels, has criticized the White House’s crypto announcements as “nothingburgers” and “sell the news” events. He also expressed concerns about the impact of Strategy’s constant bitcoin buys on the cryptocurrency market.
Challenges Facing the Economy
Thompson’s thesis is based on the belief that the Trump administration’s policies could negatively impact the economy in the next six to nine months.
He highlighted four main challenges, including the Department of Government Efficiency’s efforts to cut government spending, the crackdown on illegal immigration affecting the labor market, uncertainty around tariffs, and the Federal Reserve’s cautious approach due to inflation concerns.
Predicting the Bottom
Given these challenges, Thompson believes that risk-on assets like stocks and bitcoin are unlikely to perform well in the near future. He suggested that the White House’s lack of concern about a potential recession is a strong indicator of the economic outlook.
Thompson speculated that the current policies could continue until they become unsustainable or until the beginning of 2026. He compared the situation to a controlled burn, where the government is trying to address economic issues before they escalate into larger problems.
