Wall Street Says Bitcoin May Have A Breakout
One of the largest crypto bulls on Wall Street said the price of Bitcoin (BTC) could be set to break, as long as it continues to remain close to its current level of $7,500 dollars.
Bart Smith, director of digital assets for the Pennsylvania-based Susquehanna International Group, provided this analysis during an interview with the news channel CNBC. During the time on the air he said that he is always watching to see if bitcoin will continue to advance towards higher highs, as the currency bounces from the year's low to where it is now. So Smith concludes that the key level of support is $6,800.
“The technicians I have talked to are concerned about $6,800. That’s the level where I think, if it breaks through, it would be negative.” Smith said.
Echoing comments by Fundstrat’s founder Tom Lee, a Wall Street strategist, Smith said it is a positive sign that the price of bitcoin did not experience a massive sale immediately after the news that US regulators had denied the Winklevoss brothers' latest application of bitcoin ETFs.
Influence Of The Regulations
While the price of bitcoin fell by about $1,000 dollars in the week following the ETF's denial by the SEC, the currency did not forego all the gains it had made during the period prior to the ETF's decision. So it has also managed to stay well above the key level of $6,800 dollars.
Smith also explained that institutions have yet to deal with the reality of bitcoin's risk profile. Although it is a highly volatile asset, large-scale buyers can use it to reduce the risk of their overall portfolio.
“Bitcoin basically has a zero correlation to stocks, and by going one percent bitcoin and 99 percent equities, my risk profile is lower,” he said. “Square is half as volatile as bitcoin. So if I own $100 of Square and own $50 of bitcoin, I’ve basically got the same risk on.”
Once institutions start thinking about bitcoin, branded pensions, endowments and insurance companies could start taking small positions in the famous virtual currency. This would most likely prompt a move in a bullish cycle. Furthermore, this is what other experts in the field believe, including John McAfee, Bill Miller or Mike Novogratz.