Investors logging on today to look at Bitcoin, the king of the cryptocurrency world, will see values under $4000, which is bit stomach-churning for some.
Then you have mixed reports and nuanced predictions even from individual analysts and experts.
Here’s an interesting one from Michael Bucella of Blockchain Capital Partners; Bucella was formerly Goldman Sachs VP of Multi-Asset Sales.
In a recent CNBC broadcast, Bucella talked about Bitcoin prospects in a somewhat complex way.
Explaining the pounding that Bitcoin has taken ever since its high around $20,000 last year, Bucella referred to a long slow decline.
“It’s been a significant distress cycle,” Bucella said.
He also seem to suggest that that distress cycle has led to a gigantic washing out of newbs and small private investors and those with no stomach for staying the course on Bitcoin.
“I think a lot of the volatility (unintelligible) we see in the market right now is a function of the participants who are still there,” Bucella said, talking a little bit like the Micro Machines guy from the 1980s while warning that another bottom may emerge.
“The last leg of that distress cycle is typically the most volatile and also the most short-lived,” Bucella said, adding that it’s not outside the realm of possibility that Bitcoin could fall down to the $2000 range.
Nevertheless, Bucella maintained, the entrance of smart money into the market supports the theory of a long-range recovery that’s going to be pretty strong with some real as of yet undefined upside.
“If you think about the best investors in the market,” he said, “they’re very patient – and they wait for that last leg of that distress cycle to set in.”
Citing investments by institutional investors like Harvard, MIT and Yale, Bucella pointed out that a lot of this institutional money is coming into the private side of the market – “strong hands” in the cryptocurrency world, he said, are investing mostly not in Bitcoin values themselves, but in companies that are going to be supporting blockchain technologies and cryptocurrencies.
That, he proposed, is often a sign of sophisticated investment that’s coming in in a more subtle way, making plays in the support structures that will ultimately grow the entire sector.
That’s interesting news for Bitcoin traders of all stripes – whether you’re short-term or long-term, you can think about what’s being proposed here and understand whether it’s a good idea to make an entry now, or build a core position or in the short term, or whether it’s good to dump some of this stuff before that last leg hits.