CME Group Inc. (CME) said it expects Bitcoin and the Litecoin will fall below $2,000 for the first time next month as global markets continue to react to news about the collapse of the value of the virtual currency.CME Group Chief Executive Brian Kelly said Tuesday the two currencies are “failing” at par and that it would likely see prices plummet below $1,000 before the end of the year.
“I think the question is when it gets to $1.5, $1,” Kelly said at a conference call with analysts.
“It’s likely to happen at $1.”
The Bitcoin price has been on a tear over the past few weeks, jumping from around $7,500 in January to more than $15,000 in February.
Litecoin prices are also up, but Kelly said they may fall back toward $3,000 as investors are concerned about the currency’s future.
Kelly said it’s important to remember that Bitcoin and LTC are both virtual currencies and the value fluctuates daily.
“You can’t just put your money in a wallet that’s safe,” Kelly told analysts.
“We have to recognize that there are a lot of people who may be using Litecoin and they’re buying it in a way that’s risky,” Kelly added.
“So, the question for us is do we continue to push for Litecoin to get better, or do we stop trying to push it?”
He added that while there’s a lot more upside in the market than there is downside, the volatility is “not a good thing.”
Kelly also said CME will likely hold off on its $5,000 benchmark, which is one of the more popular benchmarks for the currency.
“If we’re looking at $5 we have to be very conservative about it,” he said.
“I think we’ll continue to try to push Litecoin higher.
I think it will take a while to hit that point.”
Kelly said that if Bitcoin did get to $2 million, it could make it a better currency for the U.S. and Canada, but it’s a risky bet for the rest of the world.
“There’s going to be a lot that happens in the coming weeks and months, and it’s hard to predict,” he added.
“This is a very volatile time, and we want to make sure that we’re investing in the right place at the right time.”
Kelly told analysts that he is optimistic that the currency will be “a great store of value,” but that it’s still “not the gold standard” for currency.
The CME group, which has been investing in cryptocurrencies since it launched in 2001, said last week that it will hold off from making an announcement until it sees “significant changes” in the currency, including the addition of a regulatory framework for virtual currencies.