Crypto Market Watchers Worried about Bitcoin Volatility, Speculative Nature

During the past few days, several executives and analysts have commented on Bitcoin, most of them voicing concerns about its high volatility.

Bitcoin remains firmly planted in headlines, continuing a streak of several months in which it has been one of the hottest topics around. Over the past few days, the largest cryptocurrency by market cap was hit by a series of skeptical comments from executives, entrepreneurs, billionaires, and regulators. 

On Wednesday, long-time gold analyst Michael Dudas told CNBC that cryptocurrency-based assets represented a “dicey investment.” Dudas, a partner at Vertical Research, believes that the extreme volatility of Bitcoin is a problem for investors. Despite referring to cryptocurrencies as “speculative investments,” he thinks the market is here to stay, especially after CBOE and CME Group launched Bitcoin futures trading. 

DataTrek Research co-founder Nick Colas went so far as to offer some Bitcoin price predictions. He told CNBC that Bitcoin might swing between $6,500 and $22,000 in 2018, probably demonstrating an even higher volatility compared to 2017. These figures are less generous than the $60,000 target provided by TenX co-founder Julian Hosp

Ira Epstein, director at Linn & Associates, said in an interview with Bloomberg that Bitcoin was more of a “speculative vehicle” than a regular currency that could be used for buying goods. 

“I cannot go to McDonald’s with my Bitcoin and get some coffee,” Epstein noted. 

William Galvin, secretary of the Commonwealth of Massachusetts, said that the US state’s top regulator might issue a warning on Bitcoin because it “doesn’t pass the smell test” and is “entirely speculation.” 

On Thursday, Ark Investment Management founder and CEO Catherine Wood was positive on Bitcoin, saying that the cryptocurrency was an idea bigger than Apple. She revealed that her fund could not directly hold Bitcoin, but it bought Bitcoin Investment Trust (GBTC) shares in 2015. 

Billionaire Tilman Fertitta, Landry's founder and CEO, finds obvious similarities between the cryptocurrency boom and the dot-com bubble. However, he thinks the market is here to stay and is concerned that cryptocurrencies are not insured. 

FiREapps CEO Wolfgang Koester noted that cryptocoins are too volatile to be considered by companies. According to Koester, state-issued cryptocurrencies will be suitable for corporations, which “are waiting for governments to issue those digital currencies so that they can take advantage.” 

Currently, Bitcoin is trading at $14,422, facing some resistance after news on South Korea’s intentions to regulate the market.