Bitcoin’s volatility is just beginning, investor says
Bitcoin has taken him to the chin lately, including earlier this week over the announcement that China would crack down on cryptocurrency mining and trading. And while Bitcoin’s loyalists have certainly performed well over the past 12 months – it has more than tripled in that time frame – there is still a lot of uncertainty inherent in the cryptocurrency realm, says Brian Battle, advisor at PT Asset Management, who says investors can expect wild price swings to continue.
“When it comes to cryptocurrency volatility, we are only at the beginning of digital currencies and cryptocurrencies and there is a lot of competition, a lot of winners and losers,” said Battle. voicing on BNN Bloomberg Monday.
“And that’s because it’s so new and so fresh and we’re making it up as we go,” he said. “It’s a very dangerous profession and it’s really speculative at this point,” he said.
Bitcoin fell below $ 32,000 on Monday morning in part in response to a report by the Communist Party of China-controlled news organization Global Times which said bitcoin mines in China’s Sichuan province have been closed. Sunday, leading to a 90% shutdown of the country’s mining operations as Chinese regulators, which have banned financial institutions from providing cryptocurrency services, seek to curb speculative crypto-trading and financial risks in place .
“The exit window is closing and we are working to find mines overseas to place our mining devices,” a Sichuan-based industry insider told The Global Times on Sunday, who requested anonymity.
Bitcoin, which started breaking out of sub $ 10,000 territory later last year, hit an all-time high of $ 64,829.14 in April, but has fallen since then, many in the investment world. still being fiercely opposed to whether Bitcoin or any other cryptocurrency should have a place in his investment portfolio. (All figures are in US dollars.)
“I have sold almost all of my bitcoins. I don’t need it, ”CNBC Mad Money investor Jim Cramer said in a segment responding to news from China on Monday.
Meanwhile, Bitcoin’s highs and lows this year have been attributed in some places to Tesla’s investment, with tweets from CEO Elon Musk pushing currency and other cryptocurrencies up and down.
In response, Euro Pacific Capital CEO Peter Schiff posted on Twitter in May: “If a single @elonmusk tweet can have so much influence on the price of #Bitcoin, how can we seriously consider it? is it about money? “
Still, Bitcoin has its fans, such as billionaires Mark Cuban and Tudor Jones, with Jones saying last week on CNBC’s Squwak Box: “I like Bitcoin as a tool for portfolio diversification. Everyone asks me what should I do with my bitcoin? The only thing I know for sure is that I want 5% in gold, 5% in bitcoin, 5% in cash, 5% in commodities.
Battle says the world has yet to decide whether Bitcoin will end up being a real, usable currency or whether it will primarily be an asset held much like gold.
“We all learn, but if you don’t like these wild swings [where] Bitcoin could cost $ 25,000 tomorrow or $ 75,000 tomorrow – that’s exactly how a small, thinly traded market works, ”Battle said.
Battle says that a crucial factor for the longevity of cryptocurrencies in general is how sovereign banks around the world respond, in that as Bitcoin and others gain in value and strength, banks Central authorities will think more carefully about whether or not to allow them to continue, much in the way China is once again hinting that it might budge.
“There will be, I believe, a digital currency from the Federal Reserve, which could therefore compete with all of these private cryptocurrencies,” Battle said. “But the part of the story that may be missed is asset tokenization – the idea that you can take an asset, digitize it, and put it on the block – it’s something that’s real and is happening on the block. the market, so let’s make sure we separate those two stories.
Bitcoin and others like Ethereum and Zcash took one step closer to legitimacy in the eyes of some people when Coinbase, the largest cryptocurrency exchange in the United States with around 50 digital assets traded, became a listed company in stock exchange on the NASDAQ in April. Giving up the IPO route, Coinbase opted for a direct listing, giving it an initial market cap of $ 85.8 billion.
Founded in 2012, Coinbase currently has around 56 million users compared to 32 million in 2019. The company’s first quarter 2021 profits saw revenue sequentially triple to $ 1.80 billion and earnings per share rose. at $ 3.05 and earnings of $ 771 million compared to $ 177 million for the fourth quarter of 2020.