WASHINGTON, DC (CU)_As Bitcoin prices have doubled to more than $40,000 in less than a month, while crypto currency bulls argue the dramatic surge is justified, some on Wall Street disagree.
According to Michael Hartnett, chief investment strategist at Bank of America Securities, this recent rally may be another case of speculative mania, such as the more than 400 per cent surge in gold prices in the late 1970s, Japanese stocks in the late 1980s, dot-coms in the late 1990s as well as the housing prices in the mid-2000s, which all enjoyed triple-digit percentage gains before crashing down dramatically.
However, Hartnett did not claim that Bitcoin prices would plunge per se. Instead, he insists that the hike in crypto currency prices reflect the “increasingly speculative” investing behavior.
Meanwhile Hartnett is not the only one who has been critical of crypto currency prices. Some experts warn that the need to own a Bitcoin against a currency decline has ceased to exist, given that the US dollar has stabilized somewhat recently.
Mike O’Rourke, chief market strategist with JonesTrading, warns that Bitcoin chasers fail to protect themselves against a dollar meltdown. “[…] they are simply paying twice as much for an ‘asset’ than they were at Thanksgiving,” he said.
Nevertheless, Bitcoin chasers remain convinced that prices can keep climbing and refer to the likes of PayPal and Square towards crypto currency, as well as the interest of major investors, to refute these Bitcoin critiques.
