CNBC Economist David Rosenberg, claims that Bitcoin’s market entered a bubble phase despite it remained over 100% in the past six weeks and a strong correction. Many believe that BTC will continue higher in the upcoming weeks but the analyst is quite bearish on BTC as we can see in today’s Bitcoin news.
The CNBC economist said that the cryptocurrency is overvalued and argued that it could be the biggest bubble on the market. After the strong correction from $34,000 to $32,000, BTC is up by 100% in the past six weeks. The cryptocurrency traded to a new all-time high on Friday as the institutional capital continued to enter into the asset. Many in the crypto space think that the rally is predicated on strong fundamental trends like the devaluation of the US dollar and there has also been a huge amount of BTC accumulated by both institutional and retail players. However, not everyone believes that the market will continue shooting higher.
It's rapidly becoming clear that the pain trade in #Bitcoin is much higher.
It's apparent that institutions are coming in w/ big checks. Much of that capital still has to "get through docs" and "investment committee".
They thought they'd buy $20k. They'll be lucky to buy $30.
— Travis Kling (@Travis_Kling) December 26, 2020
David Rosenberg who is the chief economist at Rosenberg commented that he believes global markets are overextended. On the stock market, the investor commented:
“Based on our [stock market] valuation work, we are anywhere from 20% to 30% overvalued based on a whole bunch of different metrics.”
He echoed this bearish sentiment for BTC Arguing that it could be the biggest overextension or bubble phase on the market:
“The parabolic move in bitcoin in such a short time period, I would say for any security, is highly abnormal.”
Despite the skepticism about Bitcoin, he said that he remains a gold bull and noted that the previous metal has about 20% the volatility that BTC does and could even make a better safe-haven asset as a result. While there are a number of other economists that believe BTC is in overbought territory, the overall BTC trajectory remained bullish as per the Wall Street Investors. Grayscale’s Bitcoin Trust just added over 12,000 BTC on December 22nd and there’s also some news that indicates prominent Wall Street funds continued to drain capital into BTC.
In late December, Microstrategy confirmed that it purchased about $650 million worth of BTC from the open market and now the buy is up by over $300 million. Travis Kling who is the founder of Ikigai said:
“It’s rapidly becoming clear that the pain trade in #Bitcoin is much higher. It’s apparent that institutions are coming in w/ big checks. Much of that capital still has to “get through docs” and ‘investment committee’. They thought they’d buy $20k. They’ll be lucky to buy $30.”
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