BlackRock’s Top Economist Thinks Bitcoin and Ethereum Look Like a Bubble
BlackRock, the asset manager of $ 5 trillion, has traditionally not paid much attention to cryptocurrence platforms like Bitcoin and Etereum.
Now that the prices of these blocks based currency chains have increased exponentially in recent months, although BlackRock’s best-performing economists closely watch and worry.
When asked about the luck of meeting cryptocurrence at a news conference on Tuesday, Richard Turnill, chief investment strategist at BlackRock, looked at what he called “dangerous territory.”
“I look at the block chain, I look at the tables, and for me it looks very scary, and remember what we’ve seen before,” he said in reference to the characteristics of market bubbles before, such as the dotcom boom 1990.
It is this kind of nervousness that helped to deflate the recent enthusiasm for cryptography, which this year has pushed the price of Bitcoin’s increase from more than 200% to a record high of $ 3000 in June and Etereum increased by more than 5100% and one Maximum above $ 400.
Just a few days after making these recordings, Bitcoin and Etereum crushed to 25% in a single day, and so far have not been able to recover.
Etereum The price is now below $ 190, up more than 50% of its top level there is less than a month.
Bitcoin is trading at about $ 2 280, or 24% below its peak. (However, even with the wave of sales, cryptocurrences have always yielded spectacular returns in the year 2017 to date:
The price of Bitcoin has more than doubled since the beginning of the year, while Etereum is more than 23 times its value at the end of 2016.)
Graph shows the change in value of Bitcoin since 2009
BlackRock, the largest asset manager in the world, is far from the first to express its concern about the rapid appreciation of the value of cryptocurrences, which exceed 100 billion combined over the market value of Goldman Sachs (GS, 0.49 %).
In early June, Mark Cuban tweeted about cryptocurrence, “I think it’s in a bubble”, which caused Bitcoin’s price to faint at 5%. Two weeks ago, multi-billionaire investor Michael Novogratz, who has 10% of his wealth invested in Bitcoin and Etereum said he sold many of his pieces, suspecting that the digital currency had already reached a peak of ‘year. Cryptomoneda, Novogratz still predicts, “will be the biggest bubble of our lives.”
Last week, Goldman Sachs himself weighed, warning that Bitcoin could still fall 19% from its current level of $ 1,857.
However, if cryptocurrence is really in a bubble, it poses a danger to the rest of the market if it breaks that other bubbles – from housing to technological actions – have historically exploded.
After all, unlike stocks and bonds, which are intrinsically linked to the big banks and the global financial system, and Bitcoin Etereum exist in almost a parallel universe to conventional assets, with only tenuous ties to traditional Wall Street.
“If the price went down to zero tomorrow,” said M. Turnill, there would probably be no “wider financial impact on anything else.” “But this is an example of where you get great price movements in the market,” he said.
In fact, this is why BlackRock monitors the first cryptocurrent: not as a potential investment at present, but as a potential indicator of investors’ behavior in sentiment and other asset classes: the standard gold coin, bonds Or technological actions.