Cryptocurrencies might not have yet reached a bottom according to Michael Bucella. The partner at the crypto investment firm BlockTower Capital talked on CNBC Fast Money about virtual currencies and Bitcoin. Bucella said that there will be just a few occasions to buy Bitcoin once digital assets bottom.
Are We at the End of the Bear Market?
The former executive at Goldman Sachs’ Canada arm said that we are in the last days of a cycle which tend to be very short and volatile. This is why he believes that there is a possibility for Bitcoin to reach a new low. Nevertheless, he explained that reaching, for example, $2,000 will be something that will not last long.
In general, he noted that the most successful investors are those who think in the long term and are patient. Thinking about the future, he said that several investors are waiting for this last chance to enter the market and buy virtual currencies in bulk.
He then talked about how blockchain and crypto companies are working in the space. Although there was a very hard year for Bitcoin and virtual currencies, companies continue investing and creating value. He said that the smartest money is entering the space through the private side of the market. Most of these portfolios are investing in the companies that are building the necessary infrastructure for the crypto market to grow in the future.
The expert then talked about blockchain technology and virtual currencies. He said that it is important to separate blockchain technology from cryptocurrencies.
Bucella explained that it will be important for asset managers to understand how Bitcoin will behave during different macro-cycles. It is going to be very hard for a macro portfolio manager to accurately generate a price-risk strategy related to this asset class.
Furthermore, he said that since Bitcoin was created there was only just one macro-cycle. When portfolio managers take a decision about how to diversify their portfolios they take into account different assets with a history behind them. As he said, Bitcoin is in the market since 2008, which is a short period of time in macroeconomic terms to create an investment strategy around it. He has also marked that the majority of the volume in the space comes from retail investors.
At the time of writing, Bitcoin is being traded close to $4,234 according to CoinMarketCap. It has also a market capitalization of $73.68 billion.