Brian Kelly Calls for Caution While Trading “Extremely Volatile” Bitcoin (BTC)
The price of Bitcoin soared above the $12,000 USD mark earlier on Thursday this week causing a frenzy in the cryptocurrency market.
The coin is still on its volatile projection reaching highs last witnessed in December 2017 during the massive bull run. The increasing value of the pioneer cryptocurrency is sparking an interest in retail and institution investors.
Bitcoin bull, Brian Kelly calls for caution while trading BTC
Brian Kelly, a well-known BTC enthusiast and CEO of BKCM, has called for caution on investors’ side as they enter another boost phase of BTC price. The digital asset investment guru spoke on CNBC’s Fast Money on Wednesday urging potential investors to be aware of the volatility of BTC’s price.
The market is currently in a bullish phase as seen by BTC’s push past $12K, representing over 136% increase in the last two months.
Despite the awesome growth the coin is experiencing at the moment, Kelly cautions investors to understand that Bitcoin is still a risky asset class and should be handled as such. He further said,
“We are now up almost 200% for the year, ~170%. Remember this is an extremely risky asset class. Even in 2017 when Bitcoin was up 1000%, you had months where it was down 30-40%, so if you’re buying at the highs, recognize that you’re buying at the highs.”
Brian Kelly on CNBC Fast Money (Source: Twitter)
“Real buyers are coming in”
This bull run is however influenced by different factors to those witnessed during the massive run in 2017 according to Kelly. One of the biggest differences is the quality investors coming in, whereby it’s real buyers and institutions pushing the price as opposed to FOMO and the hyped market seen 18 months ago.
Kelly further believes that the upcoming Bitcoin halving happening in May 2020 is also responsible for the sky rocketing prices of BTC. Given the anticipated decrease in the supply of Bitcoin, miners and enthusiasts are stocking up the coin hence the increase in prices.
“You’re actually starting to see real buyers coming in. We talked about it when it was closer to $5,000 or $6,000 and actually even in the $4,000s that what you’re seeing is we have a supply cut that’s coming in 2020. You generally see a rally one year before and one year after. So right on cue, here comes Bitcoin rallying.”
Is Bitcoin a safe haven asset?
Bitcoin has long been touted to replace gold as a safe haven asset given the increasing geopolitical instabilities and economic tensions around the world. The US-Iran tensions in the gulf, the economic turmoil in the South American states of Venezuela and Argentina and US-China trade war are all influencing capital flight to Bitcoin and other cryptocurrencies.
Brian attributes this to investment thesis discouraging the use of “safe haven” to describe a volatile asset class as crypto is.
— CNBC's Fast Money (@CNBCFastMoney) June 24, 2019
The Bitcoin investment thesis lies in the fact that as people continue to buy into BTC, treating it as a safe haven asset will be the case. However, currently the asset is still one of the most volatile asset classes in the world hence does not provide a reliable safe haven for investors. He further said,
“You have to exercise a little bit of caution with it. But there is an investment thesis that this could disrupt gold. And if this disrupts gold, you’re talking about prices that will exceed the last bull market.”
Bitcoin’s price is $57,395.44 BTC/USD exchange rate today. The real-time BTC market cap of $1.07 Trillion currently ranks #1 with a chart dominance at 62.37%, daily trading volume of $28.68 Billion and live coin value change of BTC -0.75 in the last 24 hours.