Tollbacken Capital Advisors CEO Michael Purves believes bitcoin may not see institutional money as an asset after failing to perform as a non-correlated asset.
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- Entities Can Abandon Bitcoin
- Bitcoin’s Great Month
recently bloomberg interviewMichael Purves, CEO of Tollbacken Capital Advisors, says he has been going through a bearish phase on bitcoin since January, and his stance hasn’t changed.
He claims that his firm entered a short trade last week with a target of $15,000.
According to Purves, Bitcoin’s long-term bullish momentum began to break at the end of January.
The top cryptocurrency is down 55.86% on a year-on-year basis.
Entities Can Abandon Bitcoin
Bitcoin surpassed $20,000 in late December and then hit new highs in 2021. Purves says the massive rally was driven primarily by institutional investors who started buying the major cryptocurrency because of the “inflation hedge” narrative.
However, bitcoin has failed miserably as a portfolio diversifier. As Purves mentioned, it is heavily correlated with the S&P 500 and NASDAQ 100.
“What we have learned over the past year is that bitcoin is not uncorrelated. It is not uncorrelated,” he said.
Due to bitcoin’s inability to act as an inflation hedge, institutions will appear to buy the dip if the price of bitcoin drops significantly.
Bitcoin’s Great Month
Bitcoin is the worst-performing asset class of the month, losing 15% in value, as reported by U.Today.
David Kelly, chief global strategist at JPMorgan Asset Management, recently said that the aggressive monetary policy of the US Federal Reserve had forced investors to liquidate their cryptocurrency holdings.
The cryptocurrency is currently sitting below the $20,000 level on the Bitstamp exchange.