Fred Wilson, managing partner at Union Square Ventures, recently published a blog post (titled “What Bear Markets Look Like”) in which he noted that digital currency prices may continue to decline.

Wilson compared the performance of Amazon stocks during the Dot-com bubble from the late 1990s and early 2000s to that of cryptocurrency prices when they reached their all-time highs in December of 2017.

Comparing Amazon’s Stocks In Late 90s To Cryptos

Wilson, an MBA graduate from the Wharton School of Business, wrote: “Amazon peaked in the Internet bubble in late 1999 at around $90/share. Almost two years later, at the trough, you could briefly buy Amazon at $6/share. And then it took until late 2007 for Amazon to trade above the highs it reached in 1999.”

Willson added:

So while cryptoasset prices are down 80-95% in USD terms over the last year, they could and probably will go lower.

In January of 2018, Wilson had recommended: “If you are sitting on 20x, 50x, 100x your money on a crypto investment, it would not be a mistake to sell 10%, 20% or even 30% of your position.”

Although there are many crypto market analysts who have tried to predict the future price of bitcoin (BTC) and other major digital currencies, there are relatively few industry professionals who have been able to provide an (reasonably) accurate forecast of the long-term performance of the nascent asset class.

Notably, shortly after Wilson cautioned investors about digital currency prices possibly declining further, the bitcoin price began to fall shaprly and has now dropped by about 8% in the past 24 hours. The flagship cryptocurrency is currently trading at around $3,924, according to CryptoCompare data.

Long-Term Investors Are Likely To Profit From Investments

While Wilson has told investors that they should be aware of the potential risks involved in investing in highly volatile cryptocurrencies, he has made substantial investments in blockchain-related projects. In June, Wilson had revealed that 15% of his active portfolio consisted of investments in crypto and blockchain-focused firms. 

According to the partner at Union Square Ventures, those investors who can absorb the potential short-term losses and have the patience to make it through the extended bear market will likely make sizable profits on their crypto investments (in the coming years). However, Wilson wrote: 

I think some cryptoasset (and possibly a number of cryptoassets) will have a price chart like Amazon’s current one in 18 years. But we will have to do what Amazon did, hunker down and build value and survive, for quite a while to get there. And I think things will get worse before they get better.

Fundstrat’s Thomas Lee Cuts End-Of-Year BTC Price Prediction To $15,000

As CryptoGlobe reported in mid-November, Thomas Lee, the co-founder of Fundstrat Global Advisors, cut down his end-of-year bitcoin price prediction to $15,000. Lee, a well-known bitcoin bull, had maintained his $25,000 year-end BTC price prediction throughout the bearish market of 2018.

However, Lee’s revised estimate is based on a “break-even” point that is calculated by using the performance data from Bitmain’s S9 mining machine. According to the Fundstrat’s data science team, the point is at $7,000 (down from $8,000).

Taking the $7,000 figure, the researchers got to $15,000 by calculating that bitcoin’s “fair value” would be at about 2.2 times its break-even price.