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Despite having increased by 400,000 percent since June 2011, some investment banking analysts believe Bitcoin’s position in investment portfolios is still up for discussion.
Bitcoin’s market volatility has been criticised once again by bankers, with experts from Société Générale taking aim at the leading cryptocurrency.
In an investor note quoted by CNBC, analysts at the bank argued that Bitcoin’s (BTC) “erratic price movements” devalued its place in investment portfolios.
The looming possibility of government crackdowns around the world, according to the investor report, places considerable downward pressure on potential Bitcoin price activity.
Indeed, the latest BTC price drop has coincided with a slew of controversial regulatory actions from governments around the world. As previously reported by Cointelegraph, the US Treasury is considering requiring cryptocurrency transfers worth more than $10,000 to be reported to the Internal Revenue Service.
The Société Générale researchers have discussed the Bitcoin and gold comparisons, agreeing that both currencies are seen as hedges against monetary debasement by buyers. However, analysts described optimistic market fluctuations and fear of losing out buying as the only claims to fame for both store of value properties, stating:
“The only potential reward to investors in Bitcoin and gold is from their positive price movement, which is essentially the only thing they have in common, apart from their ability to trigger rush buying.”
Despite recent price fluctuations, Bitcoin is up 38 percent year to date and 312 percent in the past year. Although some bankers can see uncertainty as a flaw, supporters such as Mark Yusko, CEO of Morgan Creek Capital Management, see it as a function of Bitcoin’s long-term value potential.
Speaking to CNBC on Thursday, Yusko argued that volatility was a necessary part of Bitcoin’s 223% per annum positive compounding capability over the last decade.
“#Bitcoin has the same amount of volatility as Amazon stock…when was the right time to sell Amazon? That would be never. Volatility is not your enemy.” @MarkYusko on $BTC and crypto volatility: pic.twitter.com/QLWcoR7DzA
— Worldwide Exchange (@CNBCWEX) May 20, 2021
“Bitcoin has the same amount of volatility as Amazon stock […] When was the right time to sell Amazon? That would be never. Volatility is not your enemy.”
Meanwhile, Singapore’s crypto-friendly banking giant DBS has released a report calling Bitcoin “an opportunity that fiat money cannot buy.”