Avoid Bitcoin And ‘Lead a Happy And More Prosperous Life’

Bitcoin prices pulled back from their all-time highs above $ 23,000 on Friday, but the Grayscale Bitcoin Trust (OTC: GBTC) traded higher 1.7% on investor optimism that the massive 2020 bitcoin rally will overflow into 2021.

Former hedge fund manager Whitney Tilson predicted that the bitcoin bubble would burst back in 2017, but Tilson has a different aspect of the cryptocurrency this time. On Friday, Tilson said he doesn’t recommend curtailing bitcoin or any other cryptocurrency, even at all-time highs.

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Back in 2017, Tilson said bitcoin was exhibiting signs of a classic market bubble. One of the biggest red flags at the time was the kind of investors who were asking questions about bitcoin. Tilson noted that bitcoin investors 2017 are among the “least informed investors imaginable.” This time around, Tilson said that many more investors and mainstream companies are involved in the bitcoin rally, which suggests that 2020 earnings may be more likely to hold.

How to Play: While 2021 may not bring another 2018-style bitcoin bubble, Tilson still doesn’t recommend investors buy bitcoin.

“I would never shorten any cryptocurrency – ironically, for exactly the same reason, I would never own one: it has no intrinsic value,” said Tilson.

With no intrinsic value, Tilson said the price of bitcoin could literally go anywhere from $ 100 to $ 1 million and anywhere in the middle. Tilson said it is never a good idea to curtail an open ended position like that, but neither does supporting bitcoin’s valuation to the disadvantage.

“In summary, I think you will lead a happier and more prosperous life if you avoid cryptocurrencies altogether,” said Tilson.

Cymer Benzinga: Stocks, bonds, real estate and even gold have a long, well-established history of investment performance, but bitcoin and other cryptocurrencies have only been around for just over a decade.

The supply of cryptocurrency is stable, has no intrinsic value of a share of a stock or a plot of real estate, and has no bond yield or deposit certificate. Therefore, the long-term prices of cryptocurrencies will only be determined by changes in long-term investor and consumer demand.

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