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The Crypto Mile: Has bitcoin reached the dip or will it fall even further?

Watch: The Crypto Mile - The Power and Potential of Cryptocurrencies

Crypto is often heralded as the best innovation since world wide web and its disruptive power as the force that is going to redefine the world's financial networks. Its backers vouch by its liberating and reforming potential to switch transactions to decentralised finance, thus getting rid of intermediaries, including and most importantly banks. Critics, however, point out that the blockchain technology that crypto is based on has some merits but claims of crypto tokens replacing money is pure baloney.

That, however, hasn't deterred punters taking huge bets. Some made big gains, several lost fortunes – and lifelong savings. In recent months the crypto crash has only become deeper, with several false alarms of 'hitting the bottom'.

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The crypto market cap has shrunk from $3.2tn (£2.6tn) in November 2021 to barely $1tn. Bitcoin (BTC-USD) tanked to below $20,000 earlier in June, while ether, the token linked to the Ethereum (ETH-USD) blockchain, fell to nearly $1,000. The crypto churn is still on, and many claim that those still standing at the end will be the Amazons of the post-dotcom crash.

Amid this backdrop comes Yahoo Finance's new show 'The Crypto Mile' where we will be interviewing some of the leading figures in the industry, both backers and critics, to try and make sense of everything: from buying plots in the metaverse to owning NFTs.

Episode 1, published today, features a diverse range of opinions from Johns Hopkins University Applied Economics professor Steve Hanke, bitcoin educator and entrepreneur Jimmy Song, and 'the real Wolf of Wall Street' Jordon Belfort.

We try to assess if bitcoin has finally hit the floor after recent downward spiral into prices not seen since 2017, or it still has further to fall.

Read more: Crypto: Tether hole widens as it loses another billion in a day

Bitcoin had a recent rebound, jumping from levels not seen since 2017 to now stand at $21,443, up around 5% in the last seven days.

Ethereum, the second largest cryptocurrency by market capitalisation, has also rebounded to $1,234, up 10% in the last week.

Jimmy Song: 'Bitcoin hasn't hit the bottom yet'

Jimmy Song, Bitcoin advocate, developer and author, rides a mechanical bull in the exhibition hall during the Bitcoin 2022 Conference at Miami Beach Convention Center on 7 April in Miami, Florida, US.
Bull ride hopes: Jimmy Song, Bitcoin advocate, developer and author, rides a mechanical bull in the exhibition hall during the Bitcoin 2022 Conference at Miami Beach Convention Center on 7 April in Miami, Florida, US. Photo: Marco Bello/Getty Images (Marco Bello via Getty Images)

Jimmy Song believes that for those looking to ascertain whether bitcoin has reached a bottom, look no further than the current activity of the US Federal Reserve.

Speaking to Yahoo Finance, Song said that if the Fed's quantitative tightening measures escalate we can see a further drop.

Read more: Crypto: Stablecoin storm spreads after billions of tether is cashed out

"Half the equation is controlled by the Federal Reserve.

"The larger bear market we are seeing, not just in bitcoin and crypto, is due to the Federal Reserve's quantitative tightening measures.

"If the Fed continues to tighten, I can say we haven't hit bottom yet.

"But, if the Fed starts to reverse its policy and starts loosening I think you could say that we've probably hit bottom," Song said.

Steve Hanke: 'Bitcoin is a complete disaster – look at El Salvador'

Former economic advisor to US president Regan, Steve Hanke, spoke to Yahoo Finance and disputed the concept of a global Bitcoin Standard.

The Bitcoin Standard concept involves using the world's preeminent cryptocurrency as a decentralised alternative to modern central bank issued fiat currencies.

Speaking to Yahoo Finance's The Crypto Mile, Hanke said: "First let's start with the Bitcoin Standard, you can forget that one, we had a little experiment in that in El Salvador and it has ended up being a complete disaster.

"They have destroyed their credit rating for their sovereign bonds that are all denominated in dollars by passing this Bitcoin Law, so that little experiment was a complete flop."

Read more: Crypto live prices

Jordan Belfort: 'Bitcoin is a long-term hedge'

Jordan Belfort, the real 'Wolf of Wall Street'. Photo: Lucas Jackson/Reuters
Jordan Belfort, the real 'Wolf of Wall Street'. Photo: Lucas Jackson/Reuters (Lucas Jackson / reuters)

Finally, the 'Real Wolf of Wall Street' Jordan Belfort spoke to The Crypto Mile and warned against taking a "12-month or 24-month horizon" when investing in bitcoin.

The man, whose life inspired the Martin Scorsese film 'The Wolf of Wall Street' added: "With reasonable luck, I think if you take a 24-month horizon you'll almost certainly make money.

"But, if you take a three or maybe five-year horizon, I would be shocked if you didn't make money because the underlying fundamentals of bitcoin are really strong.

"It has a limited supply, and as inflation keeps rising there will come a time when bitcoin will start to trade more like a store of value and less like a growth stock."