With bitcoin spearing the reinvention of money through blockchain technology, a lot of prominent traditional asset investors are concerned about the influence and psychological impact this new found ‘bubble’ will have on global economics. Many speculate adverse effect as much as burning a lot of investors.
Michael Dudas, considered a reputable authority in metals investment business, is one of such in the category of nay-sayers to Bitcoin investment, labeling the asset as a ‘dicey investment’, in a CNBC interview. The remark comes off the heel of Bitcoin’s push to recapture its all-time high, following its recent slump.
While his opinion doesn’t come as a surprise considering the infancy of this emerging asset class, most investors have little to no knowledge of the workings of cryptocurrencies and the role they play in the revolutionary global economy. Notwithstanding, the premise for Dudas’ conclusion isn’t far-fetched, as FOMO (fear of missing out) has outwitted the common sense of even well-educated and experienced contemporary investors.
Michael Dudas is a metal’s expert with Vertical Research holding a partnership position in the organization. His experience with tangible assets like gold, which often serves as a buffer during inflation crisis, reveals a logical purview on the choice of investment. Gold has diverse real-world applications and also, has generations of proven credibility backing it up. On the other hand, bitcoin – despite being touted as digital gold – is yet to gain comparative from the traditional financial institution.
Dudas’ concern comes as a reaction to Bitcoin’s current catchup race from its recent losses in its market capitalization. Comparatively, Dudas only sees about 8% increase in the price of gold between now and the end of 2018 even with volatility on its side, whereas Bitcoin this year has grown from $1,000 to an all-time high near $20,000.
Despite the inclusion of Bitcoin Futures contracts by Cboe and CME in their trade activities and his acknowledgment that the market is here to stay, Dudas still sees the investment as speculative at best, saying “Putting this into the marketplace certainly adds a sense of legitimacy to the bitcoin markets. But again, it’s early stages, and markets do go both ways. The markets and investors might find an opportunity with these exchanges to be a little bit more negative, and be short the coins as opposed to long.” Evidently, bitcoin market and investors are in for a ride, though where it leads remain uncertain. In this light, Dudas has acknowledged that ‘more work needs to be done on the regulatory front’ which could serve as a buffer should financial losses be imminent
“If there are some very big volatile issues and the public gets hurt in any sense, I think that could cause a chill to this market without question,”‘ Dudas said. “The regulation aspect from a government could cause the market to fracture a bit.”
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Last modified: March 4, 2021 5:03 PM