Despite bitcoin’s recent surge, some skeptics have aired what seems like a backlash against the most popular cryptocurrency.
One such skeptic is Gerald Moser, Chief Market Strategist at Barclays Private Bank, who recently asserted that Bitcoin is nothing more than an ‘uninvestable’ asset.
The strategist, who has been the mind behind the bank’s investment strategy, sees bitcoin as a high-risk asset not worth adding to an investment portfolio.
While many investors rally around bitcoin as a hedge against inflation, including governments and institutional investors, the private bank’s strategist lay bare his concern over the digital currency’s volatility.
The bank’s executive argued that unless Bitcoins production comes under the full control of an organized entity and becomes a centralized currency with sovereign support, the so-called digital gold does not fit in a portfolio.
Looking at bitcoin from a portfolio perspective, Moser argued that it is almost impossible to determine the currencies next move, he said:
“Its volatility makes the asset almost uninvestable.”
Comparing Bitcoin to other risk-prone assets like oil and equities, the market strategist holds that there is a likelihood for investors to ditch bitcoin out of their portfolio should the cryptocurrency suffer any unprecedented hiccups.
Like Moser’s perspective, Goldman Sachs, an American international investment bank, had earlier warned its clients to stay away from bitcoin, claiming that the currency is not an asset class. The bank pointed to the then march sell-off as proof that bitcoin is too volatile.
Will bitcoin stand up to critics?
Meanwhile, many former bitcoin critics are gradually changing their views about the digital coin. For example, Jeffery Gundlach, co-founder and CEO of DoubleLine Capital LP, who in the past opposed bitcoin, now welcomes it with arms wide open; he now sees bitcoin as a great asset and a hedge against inflation.
Whether or not bitcoin will or can beat the claims of critics is best left to time. Do you agree?