The Bitcoin price drop will be used as a key buying opportunity by savvy investors, predicts the CEO of one of the world’s largest independent financial advisory and fintech organisations.
The observation from Nigel Green, the chief executive and founder of deVere Group, which has $12bn under advisement, comes as the price of the cryptocurrency plummeted 11% on Thursday.
Earlier this month it valued at $42,000. On Friday at 12 noon (CET) one Bitcoin was valued at $31,400.
Mr Green says: “Bitcoin bashers and crypto cynics have been revelling in this week’s price drop.
“However, for many savvy investors, falling prices will be used as a key buying opportunity. They know the long-term trajectory of digital currencies – like stock markets – is upwards.
“They will be, sensibly, treating the volatility in cryptocurrency markets as they would in traditional markets. By topping up their portfolios when prices are lower and/or taking advantage of lower entry points, they can often considerably strengthen their position. The crypto market is no different.”
He continues: “I believe we can expect further pull-back in the price in Bitcoin in the near-term, which too will be used proactively by traders.
“But make no mistake, in the long-term, prices are going in one direction: up.
“Why? Because of the digitalisation of economies and every aspect of our lives, including our financial lives, that shows that there will be an increasing demand for digital, global, borderless money – characteristics that are inherent to the likes of Bitcoin.
“Also, due to the consistently surging interest from institutional investors, multinational companies, household name investors and government agencies.
“This was evidenced, once again, last year with the decision by PayPal, one of the biggest payment companies in the world, to allow customers to buy, sell and hold Bitcoin.”
Last week, the deVere boss championed greater regulatory scrutiny of cryptocurrencies such as Bitcoin as they play an increasingly normalised role for investors.
He noted: “There is sustained and growing interest in the likes of Bitcoin from both retail and institutional investors. They are now increasingly handling the assets as they would any other asset in the portfolio –for example, sometimes profit-taking, sometimes reinvesting, using the volatility to their advantage, and using these alternatives to help with all-important diversification.
“These mainstream, normalised investor strategies demonstrate that cryptocurrencies must come into the regulatory tent and be held to the same standards as the rest of the financial system.”
Mr Green concludes: “Volatility in the crypto market, as in all financial markets, is not necessarily a bad thing for investors and can be capitalised for their long-term financial gain. Harnessed effectively, it can be a very powerful strategy.”