Bitcoin could go to zero. This is a question that many traders ask again. It is also back in the headlines, after Michael Kramer warned of a new Bitcoin liquidity crisis linked to Treasury settlements which could drive prices lower. Bitcoin crash risks are on the rise, Bitcoin downside is the focus of attention, and Bitcoin reaching zero is gaining momentum. Bitcoin’s going to zero may not be the most likely scenario, but it is still a real possibility. This is why the question of whether Bitcoin will go to zero continues to come up on search engines and in group chats.
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Bitcoin liquidity crisis and crash risk from Treasury selloff
Bitcoin Liquidity Crisis Sparks a New Crash-Risk Talk
Michael Kramer (founder and CEO of Mott Capital Management) said in his most recent note that Bitcoin is a very strong indicator for liquidity. He also warned that Treasury Settlements could drain the system by $150 billion. It is this kind of number that makes it so important and also what gets the Bitcoin to zero question back on the trending list.
Michael Kramer says:
“In my experience, Bitcoin tends to be a better liquidity indicator than most other instruments. If the Treasury settlements are a drain on liquidity, then Bitcoin could be heading much lower.”
Bitcoin has fallen about 11% since its highs of $82,500 and recently broke the support level near $75,000. Kramer believes that this kind of movement indicates a rising Bitcoin crash and an intensifying Bitcoin liquidity crisis. Traders are watching charts and asking if Bitcoin will go to zero more urgently than normal.
Bitcoin going to zero is unlikely for now
There are several reasons why most analysts treat Bitcoin’s devaluation as an unlikely scenario. The largest holders, such as MicroStrategy Some people prefer to purchase dips rather than sell into them. This is almost a way of protecting the value. Some of Bitcoin’s largest backers are said to have standing buy orders at very low prices. The United States also has a Strategic Bitcoin Reserve that gives Bitcoin a level of institutionalism most other coins don’t get.
While it’s fair to ask if Bitcoin could go to zero, right now, the answer is no. Not completely.
Bitcoin’s Downside Risk and The Zero Question Moving Forward
Bitcoin is still subject to downside risks, even if they are reduced. Sharp drops in value of up to 10% do not happen very often. Some critics still claim that Bitcoin is a speculative asset. This is not completely wrong given the rapidity with which sentiment can change when liquidity is tight.
The debate about whether Bitcoin will ever go to zero tends to die down once the liquidity returns to the system. This has been happening for many years. As of this writing, a more real and immediate risk to Bitcoin is the possibility that it will crash further and experience a greater liquidity crisis. This risk outweighs the risk of Bitcoin going zero. It is more useful to ask the question, could Bitcoin reach zero? Now. This way of thinking will help you to understand how tough the coming weeks may be.
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Source: watcher.guru
