A veteran gold analyst has spoken out and said that a lot of investors could see themselves getting burnt trading in bitcoin.
Speaking yesterday, Michael Dudas, a partner at Vertical Research, an equity research and consulting firm, said bitcoin was a ‘dicey investment’ due to the fact that it lacks regulation and a lot of money is being poured into it.
Talking to CNBC’s ‘Futures Now,’ Dudas, argued:
It’s a very speculative investment right now. Just in the last few days, the amount of volatility the market has seen has made headlines around the world.
There’s still just a lot of misunderstanding or a lot of education required about the supply of these different cryptocurrencies [and] how it’s going to play out over the longer term.
His comments come at a time when bitcoin saw its value within touching distance of $20,000 on the 17th December to then drop below $12,000 on the 22nd. Since then the digital currency has made a steady recovery and is currently trading at $16,200, according to CoinMarketCap.
This rise in price comes at a time when two of Chicago’s financial exchanges launched their own bitcoin futures earlier this month: Cboe Global Markets and the CME Group. Even though Dudas believes that the cryptocurrency market remains a speculative one, he does concede that the introduction of the futures contracts could mean that digital currencies are here to stay.
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.
Yet, while this is the case, Dudas adds that regulation needs to be further looked at. Without regulation the public aren’t protected if the market suddenly dips and investors lose their money, arguing that this ‘could cause a chill’ to the market.