Why Analyst Chooses Bitcoin Over Other Cryptocurrencies?
Jul 17, 2018 11:07 AM
It can be difficult for investors to select a single cryptocurrency from the sea of coins available in the market today.
Bart Smith, analyst at Susquehanna International Group, recommends plumping money on bitcoin. Smith, who appeared on CNBC Fast Money, opted for bitcoin because people are still “functionally using” it. "If you want to own the asset that you can actually use today and that people are functionally using, it’s bitcoin,” he said. According to him, bitcoin is the currency of the Internet.
Functional use apart, bitcoin has become a bellwether of cryptocurrency markets. It’s price trajectory has determined that of cryptocurrency markets. It is the cryptocurrency that started a revolution in digital payments and its success has led to a surge of other coins in the market. There are more than 1500 cryptocurrencies being traded today and the aggregate valuation for markets is worth hundreds of billions of dollars.
An Enthusiasm Tempered With Practical Considerations
Despite his enthusiasm for bitcoin, however, Smith thinks it might be some time before bitcoin’s applications translate into tangible adoption and investor gains.
According to him, bitcoin futures got people “really excited about all these other tokens and use cases.” “And all of the sudden you saw all of these smaller tokens, as people got excited about them, massively outperform. We got way ahead of ourselves,” he said.
Smith may have a point. Bitcoin futures have mostly underperformed the cryptocurrency market and their volumes have mostly been fairly low. Institutional investors have been mostly absent from the futures market and clearing agents, such as Goldman Sachs, are charging a premium for booking trades.
He is also skeptical of technological advancements producing gains in cryptocurrency markets in the short term. “If you’re looking at these other use cases, smart contracts, or lightning network or these different technological advancements, I think people are coming to realize, those things are very difficult and aren’t coming anytime soon,”
Source : investopedia.com